1. Don’t catch a falling knife

The Wall Street adage “don’t catch a falling knife” refers to how investors should avoid buying assets that are falling in value and will likely keep doing so. While it may be tempting to buy low, you don’t want to buy a stock and then watch it keep dropping.

Weakening fundamentals and unappealing technical indicators are two signs that you may want to stay away from buying the dip. So when stocks are falling, take a beat. You don’t have to rush to the stock market on down days. Taking your time and only making moves that fit with your long-term strategy can help ensure you don’t get caught up in buying the dip too early.

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2. Buy in batches

Many investors leave some cash on the sidelines so they can pounce on market corrections, but using all of it in one shot prevents you from capitalizing on further dips. Instead of deploying the full lump sum at once, you can use some, like 25%, of your cash now and then wait a few weeks or months before using more of your funds. Over the long term, the dollar-cost averaging strategy, which entails investing a set amount of money at regular intervals, can help you avoid emotional investing and take advantage of market dips.

The extent to which you should buy during dips depends on your risk tolerance and time horizon. Younger investors who have a longer time horizon to reach their goals are likely able to take on more risk than those nearing retirement.

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3. Focus on broad indexes

Picking individual stocks can pay off, but it is very hard to find those types of opportunities, even for the pros. Actively-managed funds often underperform index funds tracking broad indexes such as the S&P 500. Index funds also offer a simple way to get diversification in your portfolio.

Total market funds let you gain exposure to the entire stock market at a discount during corrections, and benefit during recoveries. Index funds also tend to come at low costs.

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4. Have cash on hand

For savvy investors who want to take advantage of the opportunity to snag meaningful discounts on high-quality companies during market downturns, it’s important to first know you have enough money to cover the basics. Financial advisors tend to recommend having enough cash available to cover three to six months of your living expenses (or closer to one to two years if you’re in retirement).

Having that emergency fund means that you can better weather the ups and downs of the financial markets, since you won’t have to sell at a market low to cover a surprise bill.