Charlotte, N.C. ? Wall Street investors have long been told to buy and hold. But that strategy is getting understandably tougher to stomach, especially following turbulence in the stock market.

Consider the economic landscape: About a dozen banks have failed so far this year, with more expected. The government has bailed out several financial firms and plans to spend hundreds of billions more cleaning up the fallout from the mortgage meltdown. Stock prices and home values are down, while gas and food prices and unemployment are up. Economists say not to expect a recovery until late 2009 at the earliest.

So what are investors to do? The answer varies based on several factors. One biggie: age – or how long you have until retirement. We asked people in three age groups to discuss their finances and their concerns. Then we tapped financial planners to offer advice to them – and to people like them.

Ages 55 and over

Example: Wayne Petrea, 58

His situation: Petrea, a divorced father of a teenage son, has owned an insurance consulting business for 20 years. About 18 months ago, Petrea, of Charlotte, sold off all his stocks and put his retirement money – $150,000-$200,000 – in more conservative vehicles. The money is now in money markets, CDs and an annuity (an insurance-like product that makes payments in retirement) that for a higher fee guarantees a return of at least 5.5 percent.

He said he knows finance experts say now is the time to buy, but “I have no regrets.”

Losses were beginning to erode his principal, and at seven years – he hopes – from retirement, he worried over that. “I would rather have something than nothing,” Petrea said. “When it started eating into my principal, it doesn’t take a rocket scientist to know what you need to do.”

Advice for him: “One of the errors that Wayne appears to be making is that he is reacting out of emotion,” said Anne McPhail, certified financial planner at Novare Capital Management.

If he continues to contribute $5,000 a year and invests in a diversified portfolio, the $200,000 he has could grow to about $360,000 by age 65, assuming a modest annual investment return of about 7 percent, McPhail said. The portfolio would be allocated like this: 40 percent in large or midsized U.S. stocks; 45 percent fixed income, specifically high quality corporate bonds; 5 percent international equities and 10 percent cash.

If Wayne continued working and investing until age 70, his portfolio would grow to about $528,000.

Advice for his age group: McPhail offered a three-part approach.

First, create a plan. Understand your goals and objectives, such as retirement age and lifestyle. Understand your risk tolerance, or the amount of market fluctuations you are able to withstand.

Second, execute the plan.

Third, do things that ensure success. “Start saving sooner rather than later,” McPhail advised. “Investing over long periods of time will increase your chances of success. Even though Wayne Petrea is 58, it is important for him to continue contributing to his retirement. It is never too late to start.”

You should also review your financial plan on an annual basis to make sure it continues to match your risk tolerance and time horizon.

25-40-year-olds

Example: Randi Davis, 26

Her situation: Davis, a public information specialist for Mecklenburg County, N.C., bought her first house in the University City area in December. She purchased the home from a bank that had foreclosed on the property. She paid $106,000, about $15,000 less than the tax value. The economy “worked to my advantage. I think I was able to get a cheaper house than I otherwise could have afforded.”

But house-related expenses, such as a recent $500 air conditioner repair bill, are undermining her efforts to save money, and that worries her. Her savings now stands at about $2,000, half what it was before she bought the house. Davis recently dropped her 401(k) contribution from 4 percent of her pay to 2 percent. “I was just losing so much money,” she lamented.

Advice for her: “In the early years, it is more important to make sure you are putting money away rather than focus on the returns,” said Todd Calamita, certified financial planner at RBC Wealth Management in Charlotte. If the market fluctuations are keeping you up at night, consider adjusting your portfolio so that you have a few more bonds and a few less stocks, Calamita advised.

General advice for her age group: First, pay down debt, most importantly credit card debt, which carries interest as high as 20 percent. “This enables you to keep a high credit score,” Calamita said. “These days you need a 750 or better to get the lowest rate on a mortgage. If you own a home, start paying down your house in a 15-year schedule even if you have a 30-year mortgage. There is a direct correlation between a house being paid off and your ability to retire early.”

Second, save the maximum amount possible in a Roth 401(k) plan – if your employer offers one – instead of a traditional 401(k) plan. “With the Roth 401(k), you give up the tax break now, but at retirement you won’t owe taxes on any of the gains. Since you are still young and potentially in a lower tax bracket, chances are that you will come out better in the long-run with the Roth.”

Third, stay calm. “Keep in mind that you have 30 to 40 years before you need this money for retirement,” Calamita said.

Ages 41-55

Example: Ty Berry, 42

His situation: Berry, of Charlotte, works in the mortgage industry, so his income – a large portion of which is commission-based has taken a 40 percent to 50 percent hit in the past three months. His wife, Regina, has a retirement plan at her job. They have a 3-year-old daughter, Christa.

His and his wife’s combined retirement nest egg is worth less than $200,000.

Berry reduced his 401(k) contribution from 15 percent to 10 percent of his income. He wonders if he should reduce it further or change his allocation – 70 percent stocks, 30 percent fixed income.

“It just seems like there’s no light at the end of the tunnel,” Berry said. “You start to wonder when you see the stock market drop 500 points for a couple days if you should retreat for a little while.”

Advice for him: “It is always a tough situation when you find yourself in a period when your income is taking a hit at the same time your portfolio is going down. However, at age 42, you should stay mindful that you still have plenty of working years in front of you,” said Jim McGehee, certified financial planner at Alpha Financial Advisors in Ballantyne.

“While taking a big income hit necessitates some shuffling of finances … you should try as best as possible to closely examine discretionary spending in order to continue to fund the 401(k) as aggressively as possible,” McGehee said. “While this may not be the bottom of the markets, it always starts to feel like there is no end in sight right near the end. I think it highly likely that we will look back to this period several years from now and see that it was a pretty good buying opportunity.”

As for allocation, that depends on life expectancy and risk tolerance, McGehee said. “Without gauging your willingness to accept risk, I would say that a 70 percent stock/ 30 percent bond mix is almost a little too conservative,” he said.

Make sure you have adequate emergency reserves. “It might make you more comfortable being more aggressive with the long-term portfolio if you know you have any near-term possibilities covered,” McGehee said .

Advice for his age group: “Don’t try to time this market,” McGehee said. “When big moves are occurring due to news that nobody can really predict, just hold on and focus on the long term.”

“Don’t get too conservative too early,” he added. “While retirement should be a major lifestyle event, it should not be a major portfolio event. Asset allocations should be adjusted gradually over time, and even at age 55, we should be cognizant of the fact that our portfolios likely need to have a 25-year or longer time horizon.”

Work on establishing cash reserves to cover three to six months of living expenses. “In times of greater uncertainty the chances of finding yourself between jobs or your income taking a big hit if you are self employed goes up, and the strategy of borrowing to fill the gap may not be as easy to do in the current lending environment,” McGehee said.