Investors are finding out this week just how much risk they are willing to take when it involves their money and the stock market.
"People have changed their mind about that. They do think about it more," said Darin Bugbee, financial adviser for Lawrence Financial Group, 3300 Mesa Way.
Despite last week's federal bailout for Wall Street, the Dow Jones industrials plunged Monday and losses continued Tuesday for a two-day total loss of nearly 900 points.
Despite the volatility of the stock market, Bugbee and other financial advisers are telling clients not to panic.
"I've been telling them to hang tight," said Wayne McDaniel, of McDaniel & McDaniel Financial Services, 2500 W. 31st St. "The market has sold down so far that we're at least likely to get a rally soon. If they feel like they need to reduce the amount they have in the market that would be the time to do it."
Most investors are in the markets for the long term and have time to recuperate before retirement, Bugbee and McDaniel said.
"This happens about every seven years when you have a big decline like this," Bugbee said. "It was time for it. If you are patient and wait it out, you are rewarded for it."
Investors who are close to retirement should have already moved some of their money into conservative markets, Bugbee and McDaniel said. Conservative investments mean corporate bonds and investments with fixed interest rates as well as certain types of mutual funds, they said. While these investments still go down, they don't go down as much.
"We manage money for clients and we had quite a bit in cash (investments) going into this, so most of your clients were in pretty good shape before this happened," McDaniel said.
Cash investments earn interest and are noted for their liquidity, which means they can be converted quickly to cash.
Uncertainties are still ahead for the markets, Bugbee said.
"We're waiting it out right now until we have some idea of what's really going to happen," he said.