Question: The stock market recently has been causing a lot of pain as well as panic. Is an individual investor better off selling and waiting for things to calm down, buying more shares at a lower price or just riding it out?

Answer: The typical individual investor is better off "just riding it out." As the poet said, "This, too, will pass." The big dangers in selling now in this big dip and buying later are that: a) it’s too late to sell — unless you predict an imminent worldwide depression, and b) goofing big time in your timing to buy back into the stock market. If you have cash, as some cagey, old investors do, now’s a good time to make some buys.

Q: Is buy-and-hold a strategy that is outdated, given that the market seems to be so volatile these days?

A: "Buy and hold" is never outdated for folks with a long-term horizon and for those with super-busy lifestyles. For the latter, stay away from hot stocks or hot mutual funds and rely on equity-income funds (stocks of big companies that have been paying big dividends for many years) and index funds, including bond index funds.

Q: Should an investor have a different attitude in regard to selling if the stocks that are going down are in a retirement account, such as an IRA or 401(k)?

A: Yes. For the investor who is retired or near retiring, "Margaritaville" has turned into "Panicville!" Such folks should "stay the course," meaning don’t sell, but go to church and pray that stocks will bounce back before too long. For younger investors, don’t sell, just "ride it out," but make sure your "asset allocation" (percentages of stocks, bonds and cash in your nest egg) is proper for our volatile world.

Q: How much should age play a part in what percentage of a person’s portfolio is in the stock market and how much in fixed income?

A: Age is always very important when investing. The stock market is volatile, that’s a given. "Look both ways before crossing the street." IRAs & 401(k)s make account owners their own (very amateur) investment managers — good grief. If you’re young but "jumpy" about investment volatility or simply prefer to "sleep well rather than eat well," get mostly bonds, but always have at least 25 percent in stocks at all times and no matter how old you are.

Q: Is an investor better off buying individual stocks or mutual funds?

A: For busy-lifestyle folks, mutual funds are far superior — especially "no load" funds because you don’t pay 5.75 percent in commission. Disregard overheard lunchroom chatter about someone having bought Apple when it was so cheap. But if you must buy individual stocks, be manly and just buy one or two and watch ’em like a hawk. Don’t buy a dozen stocks in equal amounts any more than you’d want to raise 12 children!

Q: Over the next year, what do you think investors should be doing now?

A: Continue your "dollar-cost averaging" (buy every month regardless of market gyrations) scheme. "Use time, not timing" (invest regularly and religiously over decades, and start investing early in life). Lower your expectations of big investment gains. Last, be optimistic. America’s gifts — profitable industries — to the world include movies, the automobile, the Internet and can’t-live-without Apple gizmos. Hopefully, future gifts (from other countries, too) will overpower the perennial nuttiness (a mild word) of politicians here and abroad.

Interviewed by Dave Segal. "Akamai Money" seeks out local experts to answer questions about business in Hawaii. If you have an issue you would like us to tackle, please email it to business@staradvertiser.com and put "Akamai Money" in the subject line.