The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has slumped 0.5% on Tuesday following a 0.9% drop in the S&P 500 on Wall Street overnight.

The shaky trade on US markets came in the wake of a renewed downturn in the oil price and as investors fretted over Monday night’s (US time) first US presidential candidate debate.

According to CNBC, Mrs Clinton “won” the first debate against Mr Trump and the US Futures market is pointing towards a higher open on Tuesday. That news didn’t help some ASX-listed stocks with exposure to the US economy, however, with BlueScope Steel Limited (ASX: BSL) closing down around 4%.

Global markets certainly are on edge once again. Investment banking giant Deutsche Bank’s shares have plunged to their lowest level in over 15 years.

Despite all the uncertainty which could see markets endure a sharp correction, it’s worth remembering that the long term direction of the S&P/ASX 200 has been up.

Over the decades, despite all sorts of negative shocks including the bursting of the technology bubble, share markets have ultimately climbed higher.

In fact, it’s this long term benefit from buying and holding good quality companies which attracts most investors to the share market.

If you own great businesses, then there’s no reason to fret about a market crash.

If you own companies that don’t have bullet-proof balance sheets or which you paid well above fair value for however, then you rightly may be nervous about the next market crash.

What should you do?

While some investors are busy buying up gold stocks, such as St Barbara Ltd (ASX: SBM) which rallied over 4% during Tuesday’s trading session, there is a calmer approach.

First, review your portfolio and consider whether any of your holdings have significant downside potential. Stocks trading on sky high multiples such as Domino’s Pizza Enterprises Ltd (ASX: DMP) are one area of possible risk – Domino’s shares fell nearly 2% on Tuesday.

Second, consider whether you should take any risk “off the table”. As the next best thing to do is (in my opinion) sharpen your pencil and start fine tuning your watch list. It’s really just a matter of when, not if, a crash will occur. Being ready to act decisively is key to maximising your investment opportunities.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. 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.