In June, when he got his first job out of college, Nick Studenski did what most Americans are told to do. He started saving for retirement.

The 23-year-old from Eagan invested heavily in his company's 401(k) plan and, on the advice of his dad, contributed additional money to an individual retirement account. In a few months, Studenski set aside more than $5,000 of his salary.

In a few weeks, more than 20 percent of that money disappeared.

The dip in share prices and volatility that fueled the worst annual stock market performance in a decade have left tens of millions of investors like Studenski shaken, if not scared.

Across Minnesota and the nation, working people have spent several months watching helplessly as big chunks of their investment savings roil in a stew of rising interest rates, trade war fears and concern about how long the economy will stay healthy.

"I know people say you don't pull out when it's bad," said Studenski, an economics major with a master's in data analytics. "But it's tough to stomach logging into your account and seeing it keep going down."

Like many Americans, Studenski has entrusted his investments to mutual fund managers. He is not planning to withdraw all his money from the market, although he has cut back what he is putting in. But like most Americans, he simply wishes that things would calm down.

The world of finance — and the world at large — "just seems unhinged," he said.

For investment strategist Jim Paulsen of the Leuthold Group in Minneapolis, panic marked the last two weeks of 2018 trading. But people like Paulsen see panic as a reason to hunt for bargains, not bail out.

"If you sell on panic and buy on optimism, you're never going to get ahead," Paulsen said. "I would suggest that the average investor not do a lot."

Keep putting the maximum amount in retirement plans that have an employer match, he advised.

What will determine the trend from the current market madness is whether the country goes into a recession, analysts say.

"Personally," said Paulsen, "I don't think we're going to have a recession. The normal signs aren't there."

According to Paulsen, the Great Recession of 2008-2012 scared people enough to curtail risky financial behavior. Instead, Americans saved money and built household worth. The ratio of financial obligations to disposable income is going down, not up, the Federal Reserve reports. U.S. Labor Department statistics show that American employers added a robust 312,000 jobs in December, with wages on the rise.

Still, as China's economy slows and a tariff war between China and the United States continues, some analysts are not as optimistic that the economy is recession-proof. Financial pros have warned for months that after years of strong growth, the stock market was due for a "correction" — a fall of at least 20 percent.

But the recent swings, exacerbated by a trade war, a ballooning federal deficit and domestic political warfare, including a partial government shutdown, strain the system and stress those invested in it. A commentator on the CNBC business channel described the market as "sick."

With sales of Apple iPhones down in China and with the company slashing revenue predictions, the Dow Jones industrial average slipped 660 points Thursday. It bounced back Friday based on the strong jobs report and reassurance from the chairman of the Federal Reserve.

University of Minnesota finance Prof. Rick Nelson recalled an adage in looking at the market upheavals: In the short term, the market reflects expectations. In the long term, it reflects the actual growth of companies. Americans are apt to overlook past gains in the face of current losses, he said.

Since the end of the Great Recession, the stock market has grown considerably. The Standard & Poor's market index was down only about 4 percent in 2018 if you factored in dividends paid to shareholders. That same index dropped 37 percent in 2008, Nelson said.

"What have people lost since 2015?" he asked. "They haven't lost anything. They have made a lot of money."

The timing of this downturn still matters to those who are about to retire and counting on investment income, he continued. But the real story is volatility, driven by concerns about corporate and government debt, whether corporate tax cuts generate one-time gains or ongoing benefits, and uncertainty about global growth and trade.

Relations with China are "by far the biggest factor" in the stock market's duress, according to Russell Price, chief economist of Minnesota-based Ameriprise Financial. Price says the United States needed to deal with Chinese theft of American intellectual property and unfair trade practices. But Trump's strategy of protective tariffs on China, the world's second largest economy, and other major trading partners has taken a toll on some U.S. businesses, raising costs and cutting sales.

On Thursday, Minnesota-based agricultural giant Cargill reported a double-digit dip in profits for the second quarter of its fiscal 2019 compared to 2018. The drop was attributable in part to trade issues in China.

The greatest risk the trade war poses to the stock market, said Price, is if it dismantles globalization and disrupts international supply chains.

That's not what Americans signed up for when they agreed to contribute significant portions of their pay to market-based savings plans. Nor did they sign up for a market regularly spooked by White House tweets.

Many young investors were teenagers during the Great Recession, which dealt an economic gut punch to their parents and left behind lessons not soon unlearned when they started earning paychecks of their own.

It made people like Amanda Schibline, 28, cautious about investing. A depressing realization greeted her Friday when she checked her retirement account and saw it had dropped 13 percent in recent months.

"I was expecting 3 to 5 percent, but not double digits," said Schibline, a Minneapolis energy efficiency consultant.

Others say the recession taught them not to sweat market gyrations.

Sarah Robinson, 27, who works at the Minneapolis tech company When I Work, has been stashing 10 percent of her salary in her 401(k) and frankly isn't sure how much value it's lost.

"I know what goes down comes back up and vice versa. Coming through the recession, I saw that," she said. "I try not to get too rattled."

It can still be a jarring lesson for young professionals who've become used to seeing their retirement accounts climb.

When St. Paul resident Lauren Tott, 25, checked her 401(k) at Thanksgiving, it sat at $15,000, evidence of her careful savings since college. It had dipped to $13,900 when she last looked two weeks ago.

"That's a huge drop," said Tott, who works in admissions at Capella University in Minneapolis. "It has been a little nerve-racking."

The wild swings spurred her to step back her 401(k) savings rate from 8 to 6 percent while still maxing out her employer match.

Like others new to investing, Tott is leaning on parental advice to avoid obsessing over month-to-month changes.

"It's not about the short-term payoff," Tott said. "It's the long-term."

Bill Stevens of Stevens Foster Financial Advisors works with many CEOs at his Bloomington financial planning business. He has counseled them to be calm and patient as they wait for the eventual recovery he fully expects.

"This is not a market based on fundamentals," he said. "This is a market based on fear of trade policies and tweeting. The fundamentals [of the market] are OK. People are afraid of what more craziness can happen."

Stevens remembers October 1987 when the Dow crashed nearly 23 percent in a single day. It came back by December. But Stevens harbors few hopes of such a quick fix in 2019.

For Studenski, similar doubts have him stashing money in the bank now rather than his 401(k) and IRA.

"I've certainly lost confidence that putting money into a mutual fund," he said, "is the best way to save." 202-662-7432 612-673-4751