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Here’s what Warren Buffett says to do when the market tanks

The stock market had its worst day in months on Wednesday, thanks to fears around rising interest rates and dropping tech shares. The Dow Jones Industrial Average plummeted 820 points, and the S&P 500 dropped 3.3 percent as more than half of its stocks entered correction territory. That leaves many investors worried and wondering what to do.

During times of stress and uncertainty, Oracle of Omaha Warren Buffett recommends keeping a level head. In response to wild market fluctuations back in 2016, he told CNBC that buy-and-hold is still the best strategy.

"Don't watch the market closely," he advised those worried about their retirement savings at the time. "If they're trying to buy and sell stocks, and worry when they go down a little bit … and think they should maybe sell them when they go up, they're not going to have very good results."

Warren Buffett, Chairman and CEO of Berkshire Hathaway.
David A. Grogan | CNBC
Warren Buffett, Chairman and CEO of Berkshire Hathaway.

Though any losses are unsettling after 2017, the first year in history where the S&P 500 showed gains every month, Nick Holeman, a CFP at Betterment, agrees that during a normal market sell-off, you shouldn't panic.

He tells CNBC Make It that he recommends investors "get ice cream with their kids and say hi to a friend they haven't spoken with in a while."

"As long as you are invested appropriately for your goals, stay away from your investment portfolio," he says.

"As long as you are invested appropriately for your goals, stay away from your investment portfolio." -Nick Holeman, CFP at Betterment

That said, if the drop does turn out to be prolonged, things get more complicated. Holeman recommends that investors be sure to re-balance their portfolios. "When market volatility picks up, your portfolio can get unbalanced, which means you may be taking more or less risk than you think."

He also advises tax loss harvesting, "a time-tested strategy that uses market losses to help save taxes." It entails selling an investment in order to generate a loss that will ultimately maximize your tax-return.

For now, however, amid what looks to be a normal sell-off, the consensus is that you should not make any rash decisions.

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This story was originally published on February 8, 2018, and has been updated to reflect today's market news.