The leaders of Japan and China got off to a tense start but have made significant progress in turning around their relations in recent years.Asia Politicsread more
Tech's hottest IPOs of the year, including Beyond Meat and Zoom, dropped on Monday, falling more than the broader market.Technologyread more
Stocks in Asia slipped on Tuesday, while investors looked toward a meeting between U.S. President Donald Trump and Chinese President Xi Jinping set to happen later in the...Asia Marketsread more
A week of dovish fireworks out of the central banking community has just gone by with most of the world's leading central banks now guiding towards easing in light of downside...Commentaryread more
"We do not seek conflict with Iran or any other country," Trump tells reporters in the Oval Office.Politicsread more
Chinese Vice Premier Liu He held a phone conversation with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin, China's Ministry of Commerce...World Economyread more
Sen. Bernie Sanders announced a plan Monday to forgive the country's $1.6 trillion outstanding student loan tab, intensifying the higher education policy debate in the 2020...Personal Financeread more
While earnings usually come in substantially ahead of expectations — as much as 4 or 5 percentage points is not unusual — the downward direction in the outlook doesn't speak...Earningsread more
U.S. President Donald Trump's senior adviser Kellyanne Conway will not testify before the House of Representatives Oversight Committee this week on her alleged violations of...Politicsread more
"We missed being the dominant mobile operating system by a very tiny amount. We were distracted during our antitrust trial. We didn't assign the best people to do the work,"...Technologyread more
PatientsLikeMe was bought by UnitedHealth following a review by Trump's Treasury Department, which scrutinized the start-up because it's backed by Chinese cash.Technologyread more
A restless market is going down, up, down again—and maybe sideways for a little while. What should you do?
Everyone's financial situation is different. What may be good advice for a 21-year-old may not be the best course of action for a 65-year-old. Some investors may be able to afford a little risk in their portfolio, but others? Not so much. And while some folks may be able to muddle through, others may need a professional financial advisor to sort out their situation.
But there are some basic things every investor should keep in mind:
The Basics ...
Diversification: You've heard the expression "Don't put all your eggs in one basket." The same holds true for portfolios.
If all your investments are in the same category, and that category takes a hit, you'll absorb all the damage. If your investments are spread out over different categories, then a big hit in one only means a little damage to you. For that reason, many investors divide up their holdings among stocks, bonds and other types of investments. And they often carry the strategy even further, divvying up stock holdings between large companies and small companies, for example. (Check out CNBC stock guru Jim Cramer's take on diversification).
Asset allocation: So if you want to diversify, how do you do it? That basically depends on your age and your appetite for risk. Generally, the older you are, the less risk you want to have in your portfolio, since a loss will be harder to make up over time. So older folks may want more bond holdings in their portfolio, because bonds are considered less risky than stocks, for the most part. On the other hand, younger investors may be willing to take on more risk and so may want a greater percentage of stocks in the holdings in hopes of greater gains over time.
Read MoreA closer look at asset allocation
Dollar Cost Averaging: Many investors purchase stocks and other investments at regular intervals in fixed dollar amounts. This tends to reduce the volatility in their portfolios, regardless of what direction the market is moving: as prices of securities rise, fewer units are bought, and vice versa. So you put $120 into a widget stock every month. The first month it cost $30, so you got 4 shares. The next month it cost $20, so you got 6 shares. In the third month, it cost $40, so you got 3 shares. So after three months, you have 13 shares. But the average price was $27 and change.
You see? More shares are purchased when the price is low, and fewer are bought when it is high, so the average price per share goes down over time. This lessens the amount of money at risk, although keep in mind that risk never goes away completely.
Of course, if you think you already know what you need to know, you can check yourself out on this market quiz.
The Next Level ...
Now for some savvy investors, market downturns mean opportunity, a chance to buy stocks with good potential for growth at bargain prices. This is where research and strategy come into play. And learning about the nuts and bolts, such as:
1. Knowing the difference between a market order and a stop order;
2. Knowing the difference between growth stocks and value stocks;
3. Appreciating the difference in risks when going long (betting it increases in value) and going short (betting in decreases in value) on a stock;
4. Understanding the metrics of the market, like P/E ratios and Beta; and
5. Knowing at least a little bit about the use of puts and calls in the options market.
Beyond that, there's a whole range of strategies and theories, from technical chart patterns to short squeezes to option straddles. Again, CNBC's Investing section provides more information on these topics. And trading programs "Fast Money ", "Fast Money Half Time " and "Options Action " debate these subjects on a regular basis.
If you think you know all the market jargon you need to know, you can check yourself out here.
Of course, some people prefer to have a professional financial advisor handle the sophisticated matters. There, too, are some individual things to consider, like what to look for in an advisor and what questions to ask about his or her work. Check out our Financial Advisor Hub for more.
This story, originally published in February 2008, has been updated.