If you were expecting 2016 to start with a bang, you got your wish — but it certainly wasn't the kind of bang you were expecting.
The market's drop of 1.58 percent on downbeat economic news from China had ordinary investors and pros wondering whether the good times for investing are about to stop rolling.
But if Monday's market swings have you considering big changes to your long-term retirement savings, experts have two words for you: Hold on.
"Retirement for most people will be a long time, and history has shown that over the long term, there are more good years than bad as it relates to market performance," said Joseph Martel, retirement portfolio specialist at T. Rowe Price.
Investors who try to time the market, jumping out when they think things are going south and piling in when optimism rebounds, are exposing themselves to the risk that they will miss major positive returns, according to numerous studies. Even a small misstep on timing can be extremely costly.
Analysts at JPMorgan analyzed market returns over the 20 years ending Dec. 31, 2014, and found that the average annual total return of the S&P 500 index was 9.85 percent. Omitting just the 10 best days during that period generated an average annual total return of 6.10 percent, or returns reduced by more than a third.
"Trying to time the market is extremely difficult to do consistently," the analysts wrote.
The truly banner days are not the only problem. Ken Fisher, founder of Fisher Investments, analyzed returns in the first three and 12 months of bull markets going back to 1932, and found that three-month returns averaged 21.8 percent and 12-month returns averaged a whopping 44.8 percent.
"Missing those huge early returns while waiting for some illusory sense of 'clarity' means missing a chance to erase a big portion of your prior bear market losses," he wrote in his book "Debunkery: Learn It, Do It, Profit From It."
T. Rowe Price, for its part, has examined which asset mixes perform best in targeted retirement-date portfolios. Analysts there reviewed hundreds of 40 year savings periods ending as recently as Sept. 30, 2015 and found that in 99 percent of them, a higher equity allocation would have generated higher returns.
Still, market turmoil can be unnerving, especially since the beginning of the year is normally a time of market strength, said Raj Bhatia, a private wealth advisor at Merrill Lynch Private Bank in Chicago.
That's why he recommends that his clients follow a plan.
"Once you have set your risk tolerance," he said, "when you see your portfolio getting out of sync, you rebalance your portfolio every six months or every year." That way, you are buying when assets are cheap. If prolonged weakness in the stock market leaves you underweighted on stocks relative to your desired mix, for example, you will be adding to your holdings when stocks are low. You will also keep your average costs down.
With people spending more and more time in retirement, the need for a long-term perspective on retirement savings is more important than ever, Bhatia said.
"Where we sit today, the outlook still is for nominal growth of 2 to 2.5 percent. I would use that as a counterbalance to the volatility," he said. "Make volatility your friend by trying to rebalance."