"This is the time to manage emotions, because we really feel that we should do something to reduce losses, but we do not control the stock and bond market," Echo Wealth Management Financial Adviser Echo Huang told Yahoo Finance Live (video above). "What we can do is focus on something we can control."
Huang first recommends that investors look to see if they can cut out some discretionary expenses or even delay a big purchase if they are worried about cash flow.
Second, Huang says: "Try to reduce withdrawals from your portfolio in the next two or three years, and waiting for the market to recover. Your financial planner may have designed an asset allocation plan for you based on your risk and your goals. it's a great time to look at it and see — and ask if your goals have changed."
To figure out how much investors need for retirement, Huang said investors who have at least 30 years until retirement should use the "traditional model" of 60% in stock and 30-40% in bonds to start.
That model "can potentially provide 4% withdrawal," Huang said. "So if you have a million dollars to start, at retirement, 4% would be $40,000 a year."
She recommends investors add ETFs, especially REITs, along with hedge fund ETFs and target-outcome ETFs that are tied to the S&P 500. She believes buying the dip could pay off when the stock market becomes stable again.
"I would suggest people considering adding more quality stocks," Huang said. "And it's good for the people who have money, the time, and also, risk number is higher. So what they can do is they can actually buy the stock at much lower prices, a more attractive valuation."
Ella Vincent is the personal finance reporter for Yahoo Money. Follow her on Twitter @bookgirlchicago.