Bouts of market volatility are an unnerving, but normal, feature of long-term investing. They’re not fun, but you can expect to see market declines periodically throughout your investing career. Our investing principles don’t change when the market is down, and yours shouldn’t either.

Yet it’s hard to sit still when the market is sliding. You can’t help but think: “Shouldn’t I be doing something?” Every investor is different, but here are a few steps that everyone should consider.

During market volatility:

  • Resist the urge to sell based solely on recent market movements. Selling stocks when markets drop can make temporary losses permanent. Staying the course, while difficult emotionally, may be healthier for your portfolio. This doesn’t mean you should hold on blindly, but we suggest taking into account an investment’s future prospects and the role it plays in your portfolio, rather than being guided by noise and fear.
  • Adapt your trading to fast-moving markets. If you must trade during volatile markets, take current conditions into account when entering orders. There are defensive steps you can take to protect an unrealized gain or limit potential losses on an existing position, such as stop orders and stop-limit orders.1 These can help give you more confidence when markets are volatile.
  • Take the long view. Markets typically go up and down, and you’re likely to experience several significant declines during a long investing career. But even bear markets—that is, periods when the market fell by more than 20%—historically have been relatively short. The Schwab Center for Financial Research looked at both bull and bear markets, based on the S&P 500® Index, going back to 1966, and found that the average bear market lasted a little longer than a year (505 days). The longest of the bears was roughly two and a half years (915 days), and it was followed by a nearly five-year bull run. Timing the market’s ups and downs is nearly impossible, but all investors would do well to ignore the noise and stay focused on their plans.