This is some of the advice I’ve seen offered up from various members of the financial media now that stocks have fallen sharply enough to be in correction territory for the first time in this six-year-plus bull market. On Monday, the Dow Jones Industrials closed down 588 points, or 3.57%, a slight reprieve from the more than a thousand points lost earlier in the day.
At times like this, investors are looking for more than specific trading ideas. They are looking for broader advice, even a bit of reassurance to calm frayed nerves.
One popular theme is that investors ought to be taking advantage of beaten-down prices and investor fear to buy on supposed weakness. Any investor with more than passing interest in markets has likely heard the expression attributed to Warren Buffett that we should be greedy when others are fearful, and vice versa.
But Steve Schaefer, a Forbes staff writer, urges a bit of caution when it comes to pursuing unbridled contrarianism.                  
“Reeling markets offer buying opportunities, but snapping up shares just because they are beaten-down is no different than selling things just because they went up,” Schaefer writes.

“Mark Travis, chief investment officer at Jacksonville’s Intrepid Capital Management, says he’s ‘nibbling’ on some stocks he likes amid the recent global rout, but isn’t backing up the truck.”
Schaefer concludes that “moments of market stress aren’t the time to abandon a carefully-constructed investment portfolio in favor of either panic or greed. In a perfect world, the plan set in place in calmer times is set up to capitalize on such periods of turmoil.”
This latter point is really solid advice and should be heeded.
Cam Hui, a former money manager and author of the respected Humble Student of the Markets blog, also provides some comfort in a post Monday.
“When a financial panic hits the markets, I have a simple checklist,” writes Hui. “Is this going to push the economy into a recession? If not, then is there some factor that will accelerate the selling, such as excessive debt that needs to be unwound, which is the typical causes of market crashes, or technical factors, such as the concentration of delta-hedging portfolio insurance programs in 1987?”
Referring to the “proximate cause of the risk-off environment today,’ namely worries about a China slowdown,” Hui asks whether a China slowdown could push the US, or the world, into a recession?
Betting that the answer to that question is no, Hui writes: “I wrote before about what a Chinese slowdown might mean for the US economy: lower commodity prices, which translates into lower input costs; more onshoring as Chinese labor becomes less competitive, though US wages pressures will be restrained because of the globalized nature of the labor markets; which means better operating margins from lower material costs and restrained labor costs.”
He concludes “this represents unabashedly good news for the suppliers of US capital. So what are you worried about?”
But not all commentators are so sanguine about the markets.
Writing for USA Today, veteran columnist Matt Krantz suggests that stocks could fall much further before turning around.
“Seeing such a rapid decline is a reminder this bull market has gone untested for too long and the pain could get worse - much worse to bring valuations back in line with reality,” Krantz writes.
“Trying to guess how low a market under pressure can go is far from precise. Markets can overshoot on the downside just as they can soar too much on the upside.”
Krantz lays out a number of scenarios for how bad stocks can falter: he’s not betting on the more dire scenarios.
But Krantz’s genuine concerns should be balanced by the perspective offered by Rick Newman, a columnist for Yahoo Finance.
Newman, indeed, offers up five reasons not to worry too much about the latest market drop.
He points out, for example, that this is nothing like the 2008 crash, adding that the U.S. economy, unlike then, is looking pretty good.
“It’s not growing as rapidly as it did in the past, but it’s still growing,” he writes. “Employers have added nearly 1.5 million new jobs this year alone, and 11.6 million during the last 5 years.

Consumers are spending more, the housing market and auto sales are on pace for the strongest year ever. The risk of another recession is just 8%, according to Moody’s Analytics. And stock-market declines don’t usually prompt recessions; they merely reflect worries about the real economy.”