Seven Ways to Handle Market Stress

Since 1950, there have also been a series of major crises, such as wars, oil embargos, presidential illnesses, political assassinations, corporate bankruptcies, debt defaults, corporate malfeasance, mutual fund timing scandals, natural disasters and terrorist attacks.

Whatever the current economic or market woes may be, there is a tendency to think that "this time" is different and that "now" things are a lot worse. Well, let me tell you, that is not the case.

Many current individual investors only have a frame of reference that dates back to no earlier than 1999. However, several investment professionals (including yours truly) have lived and worked through much more than the bursting of the tech bubble.

When the market gets bumpy, do yourself a favor and listen to someone with at least 20 years of market experience (pre-1987 crash ) to get a history lesson and obtain advice on how to cope during market crises or dislocations.

7. Finally, Don't Make Hasty Decisions

Don't confuse risk management with the need to take rushed and severe action. Risk management is a thoughtful process that identifies risk and then develops a plan to take remedial action (if necessary). Bypassing the risk-management process and taking unprovoked action is poor overall investment management. In its simplest form, a move like that is panicking. And as Jim Cramer always says, "No one ever made a dime by panicking."