Hold onto your hats, fellow Fools!

It looks set to be another volatile day on the ASX after share markets around the world crashed overnight.

In the United States, the Dow Jones was off 1.1% while the tech-heavy NASDAQ fell 1.8%. It could have been a whole lot worse had it not been for their late rebound.

Meanwhile in Europe, London’s FTSE 100 tumbled 2.7% and Germany’s DAX plunged 3.3%.

The S&P/ASX 200 (ASX: XJO) typically follows the leads set by its international counterparts, so there could be plenty of red in your portfolio today.

Twelve months ago, investors were cheering the local share market higher as it fought its way towards 6,000 points.

But it’s been all downhill since then and the ASX 200 is on the verge of an official bear market. A bear market is a drop of 20% or more from the peak, and we were down 17% as of this morning.

And that’s only the index itself – a number of Australia’s biggest and most widely-held companies are already well and truly in bear territory.

Australia and New Zealand Banking Group (ASX: ANZ), for instance, is down 36% since March 2015…

BHP Billiton Limited (ASX: BHP) has crashed 55% since August 2014…

Even Woolworths Limited (ASX: WOW), which was once considered something of a safe haven, is down 39% since peaking in May 2014.

Indeed, those sort of falls are also enough to throw some investors into a frenzy, panicking to get out of the market before it’s too late.

Some have even resorted to buying gold, which has soared to US$1,195 an ounce – its highest level in more than six months.

But therein lies your opportunity…

How should you take advantage of the recent market sell-off?

I’m stating the obvious here, but if there’s a product you want to purchase, you’d prefer buy it on sale than when it’s at full price.

It’s a simple concept, and one that applies to virtually any item – whether it be a brand-new car or a 24-pack of toilet paper rolls.

It’s a fact.

We all look for bargains when we buy goods and services, because it means more money left over for ourselves. We can buy more of the good, or else put the cash towards something else entirely.

Win-Win.

But there’s a difference when it comes to shares – not literally speaking, of course, but in the sense that some individuals get cold feet when it comes to investing decisions.

They see share prices drop and panic.

Rather than buying, they immediately think others in the market must know something they themselves don’t, and fear the possibility of further falls in the near-term.

For some, that means selling their shares to avoid a little bit of pain. For others, it means foregoing some fantastic buying opportunities.

Sure, that could mean being able to buy shares at an even cheaper price if they do continue to fall.

But, if the market rebounds instead, such an opportunity may never present itself again…

Surviving a Market Crash

Market falls can be scary – especially when they tumble as hard as they have over the last 12 months – and particularly since the beginning of 2016.

But it’s times like these which really define you as an investor:

Do you join, and therefore exacerbate the panic? Or do you remain composed and think rationally?

Personally, I have two methods for coping with the short-term pain.

One way is to try switch off from the markets or, more specifically, don’t even attempt to look at your portfolio.

Looking at your portfolio when the market is falling heightens the chances of you doing something irrational – something you’ll likely regret when the markets stabilise.

Another important lesson to learn is that when we invest, we buy businesses, not individual stocks.

Assuming you’ve done your research and you’re investing for the right reasons, you don’t just buy a three-letter ticker symbol that fluctuates in price.

Those shares are part of an underlying business that you buy based on the belief it will be bigger and greater in three, five, or even ten years’ time.

Even if the shares do fall 10%, 20% or 50%, doesn’t necessarily mean the business is worth that much less – that’s just what another investor at another computer screen is willing to pay you at the time.

Thinking rationally can go a long way to getting you through a difficult time on the market…

But of course, that doesn’t answer the question of…

Which shares you should buy?

I’ve recently put some of my own money to work in two new companies – ones which I didn’t own before the share market took a dive.

Given that they’re relatively small players in the overall market, I’ll refrain from naming them in case it leads to a spike in their share prices, but I can say that I’m excited about their future potential.

Indeed, I was even more excited by the price at which I bought them!

However, I still have more cash I’m looking to put to work.

There are a number of companies I already own that I would love to top up on, while I’m also exploring new ideas which could beat the market over the coming years.

Foolish Takeaway

Whether you choose to buy shares now that the market has dropped 17%, or to wait until the market volatility subsides, at least make sure you position yourself to take action for when the time is right.

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