When stock market charts look like an EKG gone horribly awry and doomsday-style pundits discuss “historic one-day drops” and impending “bear markets,” even the most steadfast long-term investor can feel unsettled. After all, when the market is falling, doesn’t it make sense to take your gains and run for cover? In most cases, the answer is a resounding “NO.”

The reality is that market downturns aren’t necessarily all bad news. In fact, such dips can represent significant buying and reinvestment opportunities for individual investors and professional investment managers alike. When equity markets are routinely increasing in value, finding good investment opportunities can be challenging. However, when the market retreats, bargain prices on investments with a strong performance history and outlook may be more readily available. Here are four things to do that may help you make the most of a market downturn.

1. Review your allocations

Back when your investment plan was brand new, you likely had diversification targets based on your goals. Perhaps half of your investment dollars were earmarked for U.S. stocks, while the remaining half were split between international stocks and bonds. The strong U.S. stock market performance may have skewed these ratios over the past few years. Review your portfolio and determine whether you need to reallocate some of your investments to achieve your diversification goals as a means of hedging against some losses.

2. Avoid the temptation to flee

Unless there is a compelling reason for you to convert to cash, remaining true to your investment plan is often the best course of action. Perhaps there was no time when the desire to flee the markets was more intense than during the Great Recession, which lasted from December 2007 through June 2009. A $100,000 hypothetical investment in large-cap stocks (as represented by the Ibbotson Large Company Stock Index) in January 2007 likely sunk to an estimated $55,125 by January 2009.¹

Had the investment been converted to cash (represented by the 30-Day US treasury bill), and then reinvested a year later in a similar portfolio, the value of this hypothetical investment would have been an estimated $155,356 at the start of January 2018. If the money had remained in the same portfolio through the downturn and recovery, the investment would be worth an estimated $238,447. That’s $183,322 more than if it had converted to cash. And simply taking one year off from the market would have cost $83,091.¹ So, consider your financial situation carefully and don’t let emotions get the better of you.

3. Look for good advice

While picking stocks on your own—or, worse, taking advice from someone who doesn’t have financial expertise or a good understanding of your financial circumstances—may seem tempting, it’s rarely a good idea. A 2017 Arizona State University study found that less than half of the common stocks traded on the New York Stock Exchange, American Stock Exchange (AMEX), or Nasdaq have monthly positive returns and just 42.6% of common stocks on these exchanges yielded a greater buy-and-hold return than U.S. Treasury bills over the same period of time.² In fact, a relatively small number of stocks typically drive the market’s growth. And even experts have a hard time picking the right ones.

Instead, consider opportunities that include a seasoned team of veteran investment researchers who are conducting long-term research and actively managing their funds. In doing so, you get the advantages of professional insight and management, letting experts select what they think are the market’s best buys instead of trying to do it yourself.

4. Keep investing regularly

One of the fundamental principles of investing for the long term is dollar-cost averaging. Simply put, it means that price changes in the market typically result in a lower average cost-per-share if you invest $100 every month for 12 months than if you invest $1,200 all at once. A market downturn gives you the opportunity to lower your average cost per share.

Reframing your views of a market correction or bear market from a time to be feared to a time of opportunity can make them less nerve-wracking. Focus on the actions you can control and the opportunities available to you to help weather the downturn and position your portfolio for bull markets to come.

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1. Morningstar, “2018 Fundamentals for Investors,” 2018. p. 13. Retrieved from: https://advisor.mp.morningstar.com/resourceDownload?type=publicForms&id=3f9dff3c-f085-47a1-98ba-0bc008df9f25
2. Journal of Financial Economics, “Do Stocks Outperform Treasury Bills?” January 2017. pp. 1-2. Retrieved from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447