In recent weeks, the U.S. stock market has seen considerable volatility, with the Dow at one point declining more than 1,500 points during a single session. Today, the Dow rose over 200 points to trade near 25,070 Thursday afternoon.
For many, the roller coaster ride can be nerve-wracking and lead to the common trap of buying high on market confidence and selling low on market fears to prevent further losses.
That's a bad idea, according to Bridgewater Associates founder Ray Dalio.
"You've got to do the opposite," Dalio said. "It's when you're not scared you probably want to sell and when you are scared you probably want to buy.
"The greatest mistake of the individual investor is to think that a market that did well is a good market rather than a more expensive market. And that a market that did badly is a worse market ... rather than a cheaper market," he explained.