An investor who stashed $10,000 in a portfolio tracking the Dow Jones Industrial Average at the end of 2001 and held on would have had $28,698 by the end of 2016, for a total return of 7.28 percent annualized, according to Putnam Investments. By missing out only on the Dow's 10 best days during that period, the investor would have ended up with just $14,697, for a total return of 2.60 percent annualized.
"Investors should stay the course," said Ryan Fuchs, a financial planner at Ifrah Financial Services in Frisco, Texas. "If you have a plan in place that is well thought out and appropriate for your situation, you should stick to it through ups and downs."
Instead of liquidating holdings, investors may consider rebalancing both to lock in profits and to bring their asset allocation back in line with their long-term objectives, said Tom Manning, chief executive officer of F.L.Putnam Investment Management, based in Wellesley, Massachusetts.
In addition to rebalancing their overall stock-to-bond allocation, investors can consider selling shares of individual stock positions that have performed well and investing the proceeds in defensive stocks, said Yorke. For example, he is trimming clients' allocations to FAANG stocks and buying exchange-traded funds that invest in defensive dividend stocks, he said.
For investors who are very worried about the market or about current events, it might also be a good time to reassess overall risk tolerance, Manning said.
"If people are losing sleep over the market and the drama that's playing out in Washington, they likely have a greater allocation to stocks than they can stomach," Manning said.
Of course, investors who are losing sleep about the market's big gains are probably in the minority.
"It's rare that a client with a successful investment calls you and says 'Gee, it's time for me to get out,'" Yorke said. "Generally when that happens they just want to ride it forever."