S&P/ASX 200 slammed: What every investor needs to know

The S&P/ASX 200’s (Index: ^AXJO) (ASX: XJO) nightmarish run has continued today, entering what looks set to become its sixth consecutive session in the red.

The local bourse has fallen another 27 points, or 0.5%, to 4982 points after falling as much as 1.4% earlier in the session. The fall follows a horror night for international equity markets which saw the Dow Jones and NASDAQ indices fall 2.3% and 3% in the United States, while London’s FTSE 100 plunged 2% as well.

Most of the falls can be attributed to high levels of volatility in China which have prompted two trading halts on the country’s CSI 300 Index this week. Add to that a plummeting oil price, tensions in the Middle East, further caution surrounding the US Federal Reserve’s future interest rate moves and nuclear weapons testing in North Korea, and investors are panicking, unsure what the market still has to throw at them.

While the major iron ore miners are trading mostly flat today, it’s the major banks doing most of the damage. Commonwealth Bank of Australia (ASX: CBA), for instance, is down 1.7%, while Australia and New Zealand Banking Group (ASX: ANZ), National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC) have all fallen between 0.9% and 1.6%.

Meanwhile, Telstra Corporation Ltd (ASX: TLS) is down 0.3%, and Wesfarmers Ltd (ASX: WES) shares have dropped 0.9%.

What should you do?

Watching your portfolio fall in value is never fun, especially when it happens as violently as it has done over the last week. While your instincts might scream at you to take your money off the table and run, it’s important to remember that market falls are a normal part of investing. Market volatility comes and goes but, as history has shown us, it’s those who stick to their guns and remain patient who are rewarded in the long run.

What would YOU do if the market crashed tomorrow?

With the ASX falling below 5,000, some experts are predicting a market crash. Discover our Foolish experts' advice on what YOU should do in the event of a crisis -- simply click here for your FREE copy of our newly updated report, "What to Do When the Sharemarket Crashes". Click here, it's FREE!.

Motley Fool contributor Ryan Newman has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. You can follow Ryan on Twitter @ASXvalueinvest.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

HOT OFF THE PRESSES: My #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.