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By PAMELA YIP
Special to the Star-Telegram

At the height of the recession and the tumult in the stock market, many workers were stunned to see their 401(k)s shrink.

How badly your retirement account was hit depended on several factors, but the average 401(k) plummeted 24.3 percent in 2008, according to the Employee Benefit Research Institute.

Now that the economy and market are recovering, it’s time to work on rebuilding your investment portfolio. Here are some steps you should take now.

Take it slow

Many consumers might understandably still be scared that the market might take another deep dive. So should you get back in now?

Sure, but do it cautiously.

"I talk to people who say, 'I’m still a little nervous,’ " said Brian Bruce, director of the ENCAP Investments & LCM Group Alternative Asset Management Center at Southern Methodist University. "Timing is an incredibly difficult thing for people."

Get back into the market in baby steps by using an investment strategy called dollar-cost averaging.

That’s where you buy securities in fixed dollar amounts at regular intervals, regardless of what direction the market is moving.

That way, as stock prices rise, you’re buying less, and as prices fall, you’re buying more.

"Don’t have this as, 'I’ve got one bullet,’ " Bruce said. "Divide it up into four or five or six months and stick to a discipline and average yourself into the market over time."

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