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

On Friday, as investors reacted to the possibility of a trade war between the United States and China, the Dow Jones industrial average fell 400 points into correction territory, marking its worst week since January 2016. The Dow dropped a total of 5.7 percent over the week, while the S&P 500 fell 5.9 percent and the Nasdaq composite fell 6.5 percent.

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
David A. Grogan | CNBC
Warren Buffett

Most analysts still consider this drop to be a normal correction, as opposed to a sign of an incipient bear market. Though 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 you shouldn't panic.

He tells CNBC Make It that he recommends investors "re-watch their favorite Super Bowl commercials, 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 more prolonged than expected, 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.

Amid small market fluctuations, however, and even a normal bull-market correction, the consensus is that you should not make any rash decisions.

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This is an update of a previously published story.