Stocks dropped on Wednesday as investors focused on growing fears about the human and economic toll of COVID-19. The S&P 500 index lost 4.4% on Tuesday, and at the close of trading was down about 27% from its February peak.

Florida and Pennsylvania on Wednesday joined the list of states that have issued stay-at-home orders, while other states extended existing shutdowns. The White House warned on Tuesday that COVID-19 could kill as many as 240,000 Americans. Meanwhile, the optimism about a near-term rebound in the economy associated with the passage last week of the CARES Act faded.

“The shape of the recovery in the global economy may depend upon how long it takes until people can or feel comfortable leaving their homes again, which is not expected until we see a drop in new COVID-19 cases in the western hemisphere,” says Jeffrey Kleintop, Schwab’s Chief Global Investment Strategist. “The longer it takes, and the more jobs and businesses are lost, the more difficult the recovery.”

What investors can do

1. 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 short-term market movements.

“If you don’t need the money for a few years, and your investments are consistent with a longer-term financial plan, then your best course of action may be no action,” says Kathy Jones, Chief Fixed Income Strategist for the Schwab Center for Financial Research.

2. Take your personal circumstances into account. For the average investor, the best course of action depends on personal circumstances, Kathy says.

For example, how soon will you need the money in your investment account? If you need money in the next few weeks and months, then you may need to sell some assets to raise cash. To lessen the impact of selling on your portfolio, you may want to harvest tax losses, Kathy says. If you have some investments that have done well, you might want to take some capital gains.

If you’re uncomfortable with market swings, you may want to cut back on some riskier investments and move that money to Treasuries or bank certificates of deposit (CDs) to reduce volatility, Kathy says.

3. Rebalance your portfolio as needed. Market changes can skew your allocation from its original target. Over time, assets that have gained in value will account for more of your portfolio, while those that have declined will account for less. Rebalancing means selling positions that have become overweight in relation to the rest of your portfolio, and moving the proceeds to positions that have become underweight. It’s a good idea to review your portfolio for rebalancing opportunities at regular intervals, and is worth considering when markets have been very volatile.