The normal instinct of a human when the market drops is to panic and sell the stocks, to cut the losses while it can be done. It is a Herd Mentality, when one sees that market has dropped and everyone is selling, one tends to follow them. It is quite natural but before doing this we have to analyse and take a decision before jumping onto the bandwagon. 

Investing in the market is a long term game and seasoned investors are aware of this and don’t panic when the market drops. The market is hard to predict, if not impossible, but the downturn is usually only temporary and the market will recover in the coming times. It is wiser to think long term instead of panic selling and wait for the market to recover.

Market Drop doesn’t always mean loss, unlike earlier times; some stocks may still hold a good position and one may on the contrary make a good profit out of it. Analyse how ones portfolio is doing before jumping to any conclusions.

 Be aware of your risk tolerance while creating the portfolio and how it will affect price fluctuation. This will help one to invest wisely in different stocks and bonds. It depends when one is investing; millennials can invest in a more aggressive stock which will be good to keep in your portfolio for a long term. One should also remember that a safe investment may reduced risk of loss but also reduces potential profits.

Invest in a diverse portfolio, like real estate, commodities, precious metal, etc so that when the market falls, one is not adversely affected. This will help to mitigate ones losses during the bear market and sustain in the downtime. 

Investing while the market is down maybe a good idea as it allows one to expand their portfolio and buy stocks that maybe at a low but have the potential of doing well in the coming days. It is like buying the stocks when they are on sale and hoping for the market to swing and make a tidy profit out of it. That being said, one should invest based on ones means and needs and not necessarily because the stock is cheap.

The bottom line is, being aware of the volatility of the market and knowing how to handle your portfolio during that period is crucial. For an inexperienced investor it can be mentally and financial devastating to see ones portfolio tumble but being aware that the downturn is temporary and maintaining it through this period is vital. Panic selling can only cause more harm than good and upset your future plans. Having a long-term goal, like for retirement, child’s education or buying a home, can help in deciding what stocks you want in your portfolio and mitigate the risk.