Even the best money managers and analysts can't predict the markets with certainty, making it less likely that average investors can do the same.
For that reason, financial advisors recommend taking a step back during times of financial gyrations to focus on the basics of financial planning, the better to protect your investment and retirement portfolios.
Doug Boneparth, a partner and financial advisor at Life and Well Planning says making emotionally charged financial decisions—especially in the middle of a whipsaw market—is a surefire way to make a big financial misstep.
"You need to stick your financial plan, if you have one," says Boneparth in an interview with CNBC. "Your financial plan serves as your financial roadmap and anchor. This helps you see the big picture, not market movements and headlines."
This week's wild swings on Wall Street was just the latest in a market that has become notoriously volatile since the late 1990s. The week that was has yet to come close to the scope of the 2008 financial crisis, or the emerging markets contagion that unsettled global investors back in 1997-98.
"Look at history. As painful as the negative markets are there is always the other side," said Diahann Lassus, partner at financial planning firm Lassus Wherle, in an interview. "After 2008 the markets made back much of the losses experienced in a very short period of time."
Lassus said the real pain to any portfolio is often felt by investors that jump out of the market during volatile times. They often miss the opportunity to participate in the gains during bounce backs.
Given their proximity to retirement, Baby Boomers and Gen-Xers tend to get the most nervous during market swings, experts say, while Millennials—who have 30 or more years before they reach retirement—tend to have a higher propensity for market volatility. They differ from older investors who are closer to their employment golden years.
"This is a time when you should review your overall asset allocation and rebalance if there is a need," said Lassus.
While looking in the rear-view is key, Lassus reminded investors that planning for financial security long-term doesn't stop at retirement. She suggested investors take a bigger picture view when assessing their returns and potential risks.
"If you are looking at retirement in a short time such as 12 to 24 months, consider gradually reducing your equity exposure and increasing your cash reserve," she says. "This will reduce the risk as you look toward potentially rolling these dollars over to an IRA."
The silver lining in a stormy market can be a huge buying opportunity, Boneparth said, who recommended tax loss harvesting as a savings strategy. He also advised investors to consult a tax professional before you sell your investments.
"This does not mean that you get out of the market," he said, adding that strategies were available to help investors realize tax savings—or potentially cut a tax bill.
For those with a Roth Individual Retirement Account (IRA), Lassus added that now might be a good time to consider converting. With stocks on the decline, she recommended conversion, then watching the market recover, and your investments can grow tax-free.
Anyone can look good during bull markets but the smartest investors are can successfully weather the inevitable rough patches. However, even a diversified portfolio is no guarantee that you won't suffer losses.
Overall, experts say that now's the time to take action by adjusting your goals, and speaking with a professional who can help you.
"There are positives that could come out of a crazy market," says Boneparth. "No investor should have to feel out of control with the finances."
--On the Money airs on CNBC Sundays at 7pm, or check listings for airtimes in local markets.