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Published: May 16, 2022 9 min read

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When stocks are plunging, the best advice is often to do nothing. You're not supposed to panic or make rash changes to your investing strategy. But doing nothing while your portfolio tanks can be hard.

Fortunately, if you're the type who must do something when markets get extra volatile, there are a few sensible and safe steps to consider that could help your finances (and your stress levels).

The stock market has been experiencing a major selloff in recent weeks, and the S&P 500 — a common benchmark used to measure how the overall U.S. stock market is doing — is down around 16% for the year. The volatility comes as investors try to understand what the Federal Reserve hiking interest rates means for their investments, especially after enjoying years of monetary policy that allowed them to make money via stocks with relative ease.

Financial advisors tend to say that when your portfolio is scarily in the red, the best approach is to stay the course. That's not so easy to do.

“If you feel like you have to do something, do something that’s not extreme," says Dan Egan, vice president of behavioral finance and investing at online investment advice company Betterment.

Here are four actions that may actually be good for you to take when the market is volatile.

Ensure you have an emergency fund