A common strategy, and one we would never recommend, is to ignore any bearish signs and hope the issue will go away. This is exactly the same as the indebted householder who hides the bills, unopened, in the kitchen drawer for fear of recognising just how bad things are. Daily reckoning is not necessary, but certainly a monthly review of finances and investments is a salutary and useful discipline to learn, and the sooner the better.
A similar option is to decide that your core holding is too valuable to tamper with. Maybe, but all options ought to be weighed up regularly, not just a select few. Going down this route we suggest you avoid all business media - though not cancelling your subscription to Investors Chronicle, of course - until things have blown over. Bad news is just bad news.
Do not follow the fund managers' mantra that every market dip is a great buying opportunity because markets always go up in the long run. This is one of the biggest lies used to encourage extra fee income. It is not good practice to hold all one's eggs in one basket - let alone doubling up on lossmaking positions.
Now calculate how much your stockbroker is going to charge you for trimming holdings; redemption costs, transaction fees, taxes, the lot. Make sure you can, when push comes to shove, actually get out in the first place. Hedge funds can be very tight-fisted when they sense a wave of withdrawals coming.
Next, use educated estimates, faithful forecasts from seasoned investors and a broad understanding of the economic climate to have a stab at guessing how far down and for how long, prices might decline. Be realistic rather than keeping your fingers crossed.
We outline our current thoughts on four broad indices, giving conservative estimates for where we think they might drop to. Remember: this is just one of many views you will hear. The FTSE 250 index of UK mid-cap stocks is back to what had been the highs in 2013, completing a rounded top just above channel resistance. We expect a drop to the 14500 area over the next three to six months, possibly 12500 in 12 to 18 months.
Similarly, the Russell 2000 index of the smallest US companies is forming a broadening top against channel resistance, suggesting that 1040 beckons and a break below 1000 suggests a deeper correction back to 865.
Japan's Nikkei had a terrible quarter, with a massive bearish engulfing candle suggesting the index has failed yet again in the 21000 area - which has capped for over 20 years. Slow if steady losses are likely.
Finally STOXX Europe 600, which failed yet again - and dramatically - around 400. September's close below 350 completes an irregular top, hinting at an initial drop to 285 (a 50 per cent retracement of the rally since 2009's low), but remember that twice prices slumped to 160 from record highs.
