Wondering what to do during volatile markets is a common question on the mind of investors. How should one react to the market action? Is it best to sell? Buy more? Hold tight?

Here is what I've found over the years that makes the most sense during rough market periods:

1) Don't do any knee-jerk selling. Investors who sell during volatile markets usually regret it later.

2) Don't forget to maintain a long-term perspective. It is very easy to get caught up in the short-term volatility of the market, to make decisions based on very short time frames. However, twenty years from now, what happens in the market this week, this month, or even this year will likely be just a blip. Keep that in mind.

3) Don't think conventional wisdom is gospel. I have found that in extraordinary times, it is not a bad idea to run against the grain in terms of what everyone is saying or thinking. Generally speaking, conventional wisdom is often wrong during volatile times.

4) Don't be afraid to nibble on beaten down favorites. This is perhaps the most important advice I can give you. Wall Street has a habit of "throwing the baby out with the bath water." You will see plenty of good stocks get trashed with the bad ones here. Don't be afraid to nibble on the good ones that decline. How do you distinguish the good ones? Look for strong stocks that will win market share. Strong stocks with solid financial positions and time-tested management. Strong stocks situated in industries that may be out of favor now but will most assuredly come back over time.

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