Time is the best stabilizer during fluctuating market periods, and financial advisory firms can help investors the most by encouraging them to ride through the rough spots.

"Time is what helps you," Jim Schrader, senior vice president with Smith Barney in Lafayette, Ind., told the Journal & Courier. "Age gives people less time or more time for their investment strategy to work. You have to get through these periods of concern like we have now, and that needs time."

So far in December, the Dow Jones Industrial Average has seen six triple-digit gains or losses and 12 of 21 days saw similar fluctuations in November, according to Mark Hulbert, author of the Hulbert Financial Digest.

Advisers can help investors understand the volatility in many ways. Ronda Walsh Schwab, an Edward Jones financial adviser in West Lafayette, shows her clients a chart depicting the historical ups and downs of the stock market with links to specific political and business events in the world.

"When they're younger, they may want stocks or mutual funds that have more of a growth opportunity and may not care as much about dividends," Schwab said. "My clients from 40 and on up care about dividends, and how those dividends are reinvested in the stock or mutual fund. Those dividends can be taken as cash after they retire."

Schrader said financial professionals should sit down with clients to determine what their goals are and how much risk they are willing to take.

"The advice is pretty consistent in the sense you're trying to do those things," he said. "But how much volatility do they want to assume?"

Schwab said she encourages her clients to have a cash reserve of three to six month's income before they begin making investments in the stock market, bonds or mutual funds.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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