Q: My husband and I have our retirement savings in a diversified IRA account. In the past two months, I lost just over $3,000, leaving me with $9,000. We're young and in no hurry to use the money, but we're not sure what to do. Should we pull out our money and invest in CDs at an FDIC-insured bank or hold out for a turnaround? We are an average working-class couple with very good credit. What is the best option for our family?

A: Listen to me very carefully. This is vitally important: Do. Not. Touch. The. Money. Do you hear me?

I do not want you to change one thing because you are, in fact, doing everything right. How can losing money be right? Because it is part of the deal you make when you invest for growth over the long term. Sure, it would be fabulous if we saw our investments only grow, but that's not how it works. Along with the upside there is a downside. So why bother? Because history tells us that if you sit tight through the bad times, you get amply rewarded in the good times.

Given how scary the losses have been over the past 18 months, I imagine you need some convincing. So here's a quick data hit to help calm your nerves: From 1950 until this most recent market slide, we have gone through ten bear markets. Until now, the worst of these was within the last decade: The S&P 500 stock index fell 49 percent during the 2000–2002 thrashing, a smidgen worse than the 48 percent drop in the 1973–74 bear market. (In the current bear market, the S&P 500 has dropped more than 50 percent from its most recent peak, in 2007.)

But don't pull the Snuggie over your head just yet. Stick with me. Even when we include the losses from those wretched bear markets, the average annual return of the S&P 500 over the past 50 years is around 9 percent. That is what long-term investing is all about.

If your money is in a bank account when the stock market rebounds, you will miss out on any chance to make up your losses and reap gains. So stay invested.

Ask Suze your questions about debt & saving money 

Suze Orman's most recent book is her 2009 Action Plan: Keeping Your Money Safe & Sound (Spiegel & Grau).

Please note: This is general information and is not intended to be legal advice. You should consult with your own financial advisor before making any major financial decisions, including investments or changes to your portfolio, and a qualified legal professional before executing any legal documents or taking any legal action. Harpo Productions, Inc., OWN: Oprah Winfrey Network, Discovery Communications LLC and their affiliated companies and entities are not responsible for any losses, damages or claims that may result from your financial or legal decisions.


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