Small retail investors should sit tight and get financial advice before responding to volatility in global markets, including New Zealand's.
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The NZX Top 50 index closed down nearly 2 percent on Monday to 11,382 - which is the lowest since July 2020 - but was less hard hit than many other markets.
Investors around the world were spooked by sky high inflation and rising interest rates, amid concern the United States Federal Reserve had missed the mark with a modest 50-basis-point hike last week.
Market players think the Fed will need to be more assertive on interest rates, in order to combat strong inflation, with expectations of a rate hike in the order of 75-basis points.
While no one could say what was next for the market, there were plenty of reasons for the market volatility, with the ongoing pandemic, war in Ukraine as well as supply and labour market shortages driving up inflation.
"We see these sort of spikes in volatility and market correction every couple of years, and every six to eight years we see a real proper correction," Fisher Funds senior portfolio manager Sam Dickie said.
"I think we all know that there is a laundry list of bad news out there at the moment - a real wall of worry."
However, he said history showed that markets did recover.
Dickie said an investment of $1000 in US equity markets in 1980 would be worth about $70,000 today, but a nervous investor who sold on downturns and bought back in later on 10 occasions, would have just $20,000.
In other words, he said it was often best to sit out the downturn, although, less nervous investors, with a long term view, could potentially benefit.
"Warren Buffett famously said 'be greedy when others are fearful', so if it's good enough for Warren Buffett then it's good enough for me."