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Advisors say stay the course amid market volatility

  • Advisors say long-term investors should not panic over the recent market sell-off.
  • The market drop is an opportunity to assess your investment strategies and potentially, to rebalance.

The market has investors seeing red — literally as well as figuratively — in the latest steep sell off. But advisors say now isn't the time for panic-driven shifts in your investment strategy.

The Dow briefly plunged more than 1,500 points Monday afternoon, entering correction territory before recovering.

Members of the CNBC Digital Financial Advisor Council say for long-term investors, the market's movement is noise rather than a change in fundamentals.

"Nothing has materially changed in the economy and interest rates were expected to go higher," said Ivory Johnson, a certified financial planner and the founder of Delancey Wealth Management in Washington, D.C.

"If you're disciplined, remind yourself of your discipline, your strategies and the long game." -Douglas Boneparth, President, Bone Fide Wealth

Panicked moves won't serve you well.

"Take a deep breath and repeat after me: I am a long-term investor regardless of what happens in the financial markets in the short term," said Diahann Lassus, a certified financial planner and the president of Lassus Wherley in Bonita Springs, Florida. "It is important to pay attention to what is happening, but it is more important to remind ourselves that the current downturn is a short-term action."

"Making changes to a portfolio based on short-term action in the market doesn't typically provide for good long-term results," Lassus said.

The right course of action depends on the investor — namely, your disposition and whether you have a plan, said Douglas Boneparth, a certified financial planner and president of Bone Fide Wealth in New York.

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Frank Bienewald | Getty Images

"If you're disciplined, remind yourself of your discipline, your strategies and the long game," he said — and hold that course.

If you have a plan but are feeling nervous, "this is where you make the phone call to an advisor," Boneparth said.

Worst-case scenario: You have no plan. In that case, now's the time to develop one, he said.

Within that broader framework, there are a few points of action to consider.

Markets going down (or up) is a reminder to rebalance, said certified financial planner Carolyn McClanahan, director of financial planning for Life Planning Partners in Jacksonville, Florida.

"Making changes to a portfolio based on short-term action in the market doesn't typically provide for good long-term results." -Diahann Lassus, President, Lassus Wherley

"People should always have an asset allocation that reflects their ability to take risk," she said.

Rebalancing can help you take some of the profits out of investments that have performed well, Lassus of Lassus Wherley said, providing opportunities to build cash reserves or diversify your portfolio with other investments.

The drop could also be an opportunity for strategic purchases, "to buy something that may have run away from you earlier," said Johnson of Delancey Wealth Management.

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