Hopefully, not at all. If you are invested in low-cost, highly diversified funds matching your risk tolerance with your asset allocation, then stay put.

Why? Because you already have greatly reduced or almost eliminated the largest headwind to anyone’s portfolio: costs. Most studies show that by reducing costs, an investor achieves their single greatest boost to investment returns. Not by being a great stock picker, but by reducing one’s costs. That is the single most effective lever (i.e., the reduction of investment costs) to manipulate when trying to increase one’s retirement account balance over an investing lifetime.

Secondly, matching your risk tolerance to your asset allocation is key so that you don’t get the urge to sell in down markets. If you are a “nervous Nelly” about high equity exposure or you are nearing retirement, then investing 80% or 90% of your portfolio in stocks is not the way to go (excluding 20 somethings from this hypothetical - who can afford to have high stock exposure). Your asset allocation should reflect your investment risk tolerance, as well as, your investing time horizon. For example, for those nearing retirement you can peak under the hood of most major life-cycle funds and see that their stock exposure probably varies between about 40% to about 60%. Adjust within this equity exposure depending on your risk tolerance.

Last, if you are utilizing funds that are non-correlated (another way of saying “diversified”), then studies show that your portfolio will weather stock market gyrations better than non-correlated portfolios. What does a non-correlated portfolio contain? Simply put, one with appropriate levels of stocks, bonds, and some alternative assets (e.g., real estate investment trusts, oil, metals, hedge funds, futures, etc.). The purpose of non-correlation is to have some assets zig (go up) when others zag (go down).

If you are not doing the above, then you have some work to do. With Vanguard forecasting market returns of 4% to 6% over the next decade, you need to market proof your portfolio to squeeze every last bit out of it. For more information, click on the title above.