What to Know About Whatever the Stock Market Is Doing Right Now

Here's a scary-sounding statement: On Monday, the Dow Jones Industrial Average had its largest one-day drop in points in its entire 120-year history. Stock markets in Asia and Europe flipped out when they opened the next day. The New York Times is publishing headlines like "The Era of Easy Money Is Ending, and the World Is Bracing for Shocks." It all seems like we could be on the verge of a 2008-scale event — or a 1929 one.

Maybe, but probably not. While you're likely to see a lot of differing opinions on TV and social media, perhaps the most important thing you can do is take a deep breath and accept that no one, not even the experts, know definitively what's going on. Some will tell you it's a market correction, in which stock prices become more realistic after rising too high for too long. Others will point out that it's not the number of points that matter, but the percent of market value that dives. In this case, while you'll hear the word "plunge" a lot, this dip (1,175.21 points) represents a change of 4.6 percent. During the 1987 crash of 508 points, the stock market dove nearly 23 percent.

That said, if you're wondering what to do next, most advice will come down to two tactics: Stay the course, but also diversify. Think about what your individual goals are for investing, and pursue them at a level of risk that you can tolerate. Many have pointed out that if you have a pension or a retirement fund, you're not immune from the ups and downs of Wall Street. But in the long run, the stock market keeps rising at about 7 percent each year. We've weathered a lot worse as an economy, and in the end, so can you.