Stay invested if you can

Try not to panic about the scary headlines and remember that staying invested is almost always the best response. Historically speaking, investors who hold on to their investments through recessions see their portfolios completely recover, and individuals who don’t invest in the market at all lose out.

Part of staying invested means protecting your portfolio from emergency expenses: Losing a job or having no emergency fund can force investors to dip into their investments. But most retirement accounts charge strong penalties — and often taxes — for early distributions.

The general aim is to have three to six months of living expenses saved in an online savings account, but if you can't get there right now, you're not alone in that struggle. Even a cash cushion of $500 helps.

If you don't have any emergency savings, there are other strategies you can use to deal with a financial setback. And if you have to dip into a retirement account, know that a Roth IRA is typically the best last resort: it allows you to pull out contributions without taxes or penalties.