A good diversification strategy will be split between stocks, bonds and other investments. It also will take into consideration how long you have until retirement (or until you need to start taking withdrawals) and your risk tolerance. Review your investment strategy regularly, and stick to it when markets get erratic.

Investing always comes with risks. By using diversification and asset allocation as part of your overall investment strategy  you can minimize your risk exposure.

When you start feeling anxious about the economic situation, remember the plan you have in place. Keep in mind that markets go up and down. The long-term performance of your account is what matters. Your plan can help you stay on track.

When news headlines proclaim market slumps and economic woes start to worry you, contact a financial professional to get the whole story. He or she can answer questions about how market volatility affects your specific financial situation. A financial professional may also suggest ways to make you less vulnerable to market changes.

When the market is in a downturn, it is tempting to get out of investing altogether. That is not always the best decision. Financial markets rise and fall quickly. Before you know it, the investments you got rid of  may rally and experience superior performance. History has taught us that knee-jerk reactions in a market slump often lead to regret when the market springs back.

Managing your investments when the markets are volatile can be tricky. As an investor, you may opt to take more of a hands-off approach by investing in Target Date or Target Risk funds. You also can hire a third party investment management company to handle your investments for you. These options will rebalance your investment allocation as you reach different stages in your life and as the markets change. Discuss your managed account options with a financial professional.