The founder of a Seattle investment advisory firm, Paul Merriman, says this is a nerve-racking time if you are counting on your investments to carry you through retirement.  High energy prices, a weak stock market and rising inflation, are threatening to sink investment and retirement plans, he said.

Merriman says it is a huge mistake to liquidate large portions of a portfolio during periods of financial upheaval and market free-fall.  This depressed market, like all the previous one will reach a bottom and begin a vigorous climb back, the 40-year veteran investor predicted.

Unless you have impeccable timing, you run the risk of selling at a low point, then getting back in too late and buying at inflated prices, he warned.  He said a better way would be to keep adding to your investment holdings whether you are using new investment money or reinvesting dividend and gain distributions.

He said to think in terms of shares, not dollars.  The lower the share price of a stock or mutual fund, the more you can afford to buy, he believes.  He also suggested reducing your annual withdrawal rate by one percentage point, at least until the market recovers.

Decide the maximum amount you are willing to lose in a given year, Merriman said. The greater the loss you can live with, the greater your asset allocation to stocks should be, he said.