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Dear Nancy Woods,

I am 45 years old and the recent downturn in the markets has me worried. I'm just starting to be able to save money at a greater amount than the past 20 years while raising a family. How does this affect me and my future retirement plans to leave the work force at 65?

Signed Will.

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Dear Will,

I agree that the recent weakness in the world's markets can be worrisome, but it's all in how you look at it. With it being January, it is the ideal time to review your financial plan, objectives and portfolio. This is the time that people are looking at how much or if they need to top up their RSP contributions, contribute to their TFSAs and tax planning. I suggest it also be the time to review your estate wishes and wills.

Especially since you are in the savings mode, I suggest that instead of having fear and less confidence in investing right now, you take the opposite approach. You should be celebrating the fact that great companies and their shares are "on sale." Mutual funds can also be bought at lower prices. When we see a decline in the markets like this, it is the time to go bargain hunting. There are many companies that are now yielding a higher dividend payment than last week, for example. The trick is to find out which ones have the security to continuing to pay the same dividend to their shareholders rather than reduce or cut it.

You may not think so, but you still have time on your side. A few years from now, you will look back and barely remember the apprehension to invest that you feel now. It is important to focus on the long term rather than the small delay in the world's economic growth now.

Consider this a great opportunity to invest your hard earned dollars for your retirement future. Don't try to "pick the bottom" but invest some money now and some in a couple of weeks. It may be the lowest prices now or not. Don't be frozen and afraid to put some money in the market now. You may not have the opportunity at these levels for a while. Or, if it does go lower, you can add money again later.

Review the suitability of your existing portfolio and reassess your projected numbers and expectations. Make sure your expectations of returns are reasonable in today's market environment. It isn't reasonable to project getting 10-per-cent returns right now and if you don't achieve it you will become discouraged and more frustrated. If you forecast using current rate levels of 3-4 per cent and your portfolio performance is greater, you'll be all the happier.

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If you can't do this objectively by yourself, and you are not already working with an investment adviser, it is a good idea to get a second opinion from an outside set of eyes. There is never a bad time to do a retirement or financial plan with an adviser.

Investing is best looked at from a logical point of view rather than an emotional one.

Nancy Woods is an associate portfolio manager and investment adviser with RBC Dominion Securities Inc. Visit her website www.nancywoods.com or send an email request to asknancy@rbc.com. You can also send your questions to asknancy@rbc.com.

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