How to survive in times of market volatility

The Dow Jones Industrial Average on election night plunged more than 800 points in after-hours futures trading, and other major market indices, including the S&P 500 Index and NASDAQ, also dropped, triggering an automatic trading halt and sending some retail investors into a state of panic and fear.

In the days that followed, markets rebounded, with the Dow reaching a record high less than a week later, on November 14. Nonetheless, these extreme and unpredictable ups and downs have many investors remaining on guard — closely monitoring the markets and their portfolios and wondering what it all means, what it will lead to and what to do next.

Watching your portfolio expand and contract in times like this can be incredibly jarring. These are your hard-earned nest eggs, your home and college and travel funds, and nobody wants to see them shrink. Ultimately, while we can't escape the ups and downs that come with being a long-term investor, there are smart ways to manage through volatility and to help ensure you're making the best decisions when it comes to your investments.

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Here are three tips to help you keep your cool during turbulent markets.

Don't freak out. Fear can lead to impulsive behaviors, which can be dangerous when it comes to your investments. Some investors may be tempted to retreat quickly and sell low when markets are falling — only leading to potentially bigger losses when markets bounce back.

Rather than basing your actions on fear, take time to monitor the situation, review your risk tolerance, speak to your advisor and make an informed (rather than rash) decision. You should also keep in mind that market events like this can present buying opportunities, and it's important to assess and respond to these events with a cool head, not emotion.

Get professional guidance. Investing can be intimidating and emotional — and the truth is, many of us are not equipped to understand market dynamics, the risks we take on and how to best manage our portfolios through major life events and periods of turbulence.

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Fortunately, there are experienced, trusted advisors available to help you navigate these uncertain times and make informed decisions. They can also help you identify buying opportunities — so don't discount the value of enlisting a qualified, trusted advisor as part of your long-term investing strategy.

Stay the course, and consider (mindful) adjustments. Times like this serve as good reminders to review your risk tolerance and allocation and determine whether or not you should stick with your current investments or modify them. In many instances, if you have a diversified portfolio that suits your time horizon and personal goals and circumstances, you'll want to maintain your current allocation.

But you may find that life circumstances have changed your desire for risk, and adjustments may be appropriate. We think regular (quarterly or twice yearly) check-ins with your advisor may help ensure you're prepared for volatility, but if it's been a while, now may be a good time to revisit your investment strategy to ensure you're on the right track.

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When it comes to investing, it's safe to assume we will continue to experience ups and downs, and it is natural to feel concerned.

But we must remember not to make decisions based on emotion. Rather, seek an experienced advisor to help you understand what's happening, and use this opportunity to review your plan. After all, history has taught us, through countless unimaginable events and periods of market turmoil, that maintaining a diversified portfolio is a tried-and-true investing strategy that can help us reach our long-term goals.

So stay cool, stay focused, and be resourceful.

— By Yvette Butler, president of Capital One Investing