Talk about times that try the soul! Nothing seems safe anymore except insured bank accounts, which pay zip after taxes and inflation. Investors who in 2008 fled the stock market, permanently, probably feel vindicated.

See also: What to do when the stock market slumps.

You might be thinking of fleeing, too, after stocks performed yet another collapsing act. The Dow Jones industrial average fell some 1,000 points in May.

You may someday regret pulling out of the stock and investments markets when values drop. — Photo by C.J. Burton

Readers of this column know that I’ve written before about getting more conservative with money. Your number one planning job — whether you’re looking ahead to retirement or are there already — is to figure out how to pay your future bills. Or, put another way, how to live within the income that you can reasonably expect.

When you’re 35, you can load up on stocks and expect to be fine in 30 or 40 years. When you’re 50, 60 or older, you need more near-term certainty in your life.

One thing certain is that stocks fall apart with regularity, and then recover. Over the past 110 years, investors have lived through bear markets (when prices drop 20 percent or more) or severe corrections (meaning markets not quite bad enough to call a bear) more than one-third of the time.

Sometimes the downturns merely punctuate a strong rising trend, such as the investor-friendly years that started in 1983 and ended with a bang in 2000. During other periods, prices zigzag — rise and fall — with no net gain except from reinvested dividends. That’s been our lot since the 2000 bust. (Historical note: The previous zigzag lasted more than 16 years, from 1966 to 1982.)

The bond market tells a different story. Since the 1980s, bonds and bond funds have gained tremendously in value — in fact, more than stocks — as inflation and interest rates declined. Who would have guessed? And who would have guessed that the developed world would suffer a deflationary debt and banking crisis that hasn’t yet reached its end?

This brings me back to your personal planning. Long, bad periods for stocks have always been followed by long, strong rising trends, although no one can predict when the next one will begin. In the meantime, anyone in or near retirement needs enough financial security to get through the current crises.

Generally speaking, you have three things to consider.

Next: Investing in your 401(k) and stocks. »