Now is not the time to panic. On the contrary, now is a great time to be investing in the U.S. stock market. 

A lot of people may be surprised by that diagnosis. Thus far, 2016 has been a rough year: Major indexes are down more than 10%, giving Wall Street its second correction in five months. Certainly the environment is scary if you're just following the news, and caution is both understandable and warranted. Right now the best investment philosophy is to be optimistic by nature, but defensive by strategy. Now is the time to be selective, to closely monitor the environment and determine if and what changes need to be made.

While U.S. markets have performed badly this year -- dropping with a swiftness few saw coming -- nearly all of that weakness is due to overseas factors. In particular, decelerating economic growth in China. Many are worried that the impact of that will spill over into other regions and markets, which is why the losses have been so widespread, cutting across sectors and regions. Those fears are overblown for a lot of companies, who have little or even no exposure to China, its economy or market.

Now, a global slowdown will certainly impact energy companies, and it makes sense to reduce exposure to oil and gas names. However, there is also an argument to be made for specific companies within those industries -- especially well-diversified energy companies with strong dividends, which are trading at attractive valuations. The overall market is offering discounts that long-term investors can be take advantage of fairly painlessly, but for those three, trying to call a bottom is like trying to catch a falling knife. Right now, the potential reward isn't worth it.

Market reaction aside, and in spite of the current volatility, there are a lot of signs that U.S. economic fundamentals remain strong. The unemployment rate is 5%, the lowest since early 2008, and the past three payroll reports showed incredible jobs growth. Housing starts rose more than 10% in 2015, another bullish sign. Meanwhile, the collapse in oil prices has meant consumer-friendly gas prices. Unlike 2008, there's no bursting of a major asset class bubble. All of that gives the economy the kind of base that is more than able to withstand short-term fluctuations.

Because of that, U.S. focused-names look like a smart bet, especially companies with strong balance sheets and which grow revenue faster than their peers and have a history of raising dividends. Dividends are particularly important in this environment, as pullbacks like the one we're experiencing now give investors the opportunity to reinvest that money at lower prices, which leads to higher total returns in the long run. In fact, 43% of the S&P 500's total annualized return between 1926 and 2014 was the result of the payment and reinvestment of dividends. Environments like this one are extremely attractive when considering those types of future benefits.

Despite the rough start to the year, 2016 is still expected to wind up as a positive year for stocks. When the recovery begins, investors who took advantage of current prices will be glad they did.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.