1. People are living longer:

Males that reach the age of 65 nowadays will have a 49% chance of living to 86. Women will have a 49% chance of living to age 89. With that in mind, it's obvious that you will still need the help of equities (stocks and stock mutual funds) to help you grow your portfolio and keep ahead of taxes and inflation.

Don't abandon these investments.

2. Rebalance where necessary.

Take a look at your portfolio winners. If you had targeted say 20% in international and it is now 30% of your portfolio. Sell enough to bring it back down to 20% and use that cash to invest in another sector that you don't own. Remember that you don't have a realized loss until you sell. Take just enough of a loss to offset the gain that you took above, and then you will pay no tax on the transaction.

3. Diversify.

Don't have any winners? Then you weren't diversified enough to begin with. You should have had enough in each asset class (large-cap, mid-cap, small-cap, international, etc.) and each style (growth, value, blend, balanced, etc.) to create an investment plan to reach the return you need with the risk you are comfortable with, and in the time period that you targeted. Believe it or not, there are some mutual funds that have managed to keep their returns higher than the more than 23% loss of the S&P500 Index this year. There are a lot of free resources such as morningstar.com that will give you the data you need to diversify and feel better about your holdings.

4. Make decisions now.

Act now. Don't look for bottoms. You don't ever know where the bottom is but you do know that stocks are steadily getting cheaper and there are some fantastic buys out there. You may not have control over the market but you do have control over what you buy and what you sell. Don't wait.

5. Get a guaranteed income for life.

Along with positions of cash, bonds, and equities, a fixed annuity should play a part in a portfolio of someone close to working part-time or retiring altogether. An annuity is an insurance contract that in return for a lump sum of money gives you a steady fixed stream of income that is guaranteed for your life or the life of you and your spouse. For people who want to spread out their risk, this is an excellent addition to a portfolio. The downside is that you don't get any inflation protection since the payments remain the same. The upside is that you get an income stream guaranteed by the insurer so you don't have to worry about managing the money. Of course, you need to make sure the insurer is financially strong enough to be able to pay you throughout the term of the contract.

People like Floyd Odlum made millions during the Great Depression, not by fleeing into cash and bonds but by buying into stocks as the market dropped. His motto during the crash was: "There's a better chance to make money now than ever before."

Don't lose this opportunity to arrange your portfolio to meet your future needs. Follow the five steps above, and you won't have to worry about what the stock market is doing ever again.