Chart a Road Map to Weather Rocky Times

Because the market has dropped so much, the best investment you can make is to get rid of debt, especially if you have high-interest debt.

However, if you are working for a company that matches any part of your retirement contributions, at least invest enough to get the match. For instance, let's say you decide to invest $2,000 this year, and your company matches that with another $1,000. That's a 50 percent return.

If you're in your 20s, now's the time to learn from the mistakes of older investors.

"If you're in your 20s and watching all this, you'll be hearing about diversification. Ask someone what they mean by that," Geraghty said.

And what they mean is you shouldn't invest all your money in one stock, one bond, one company or one sector of the economy.

If you're in your 30s or 40s and you've been putting off developing an overall financial plan that includes your investments, savings, insurance, a will, etc., grow up, Geraghty said.

Rather than fretting about a tanking market, be sure you're not taking unnecessary risks. And diversification is the key to minimizing your losses.

You should be diversified by asset class and also within each asset class. You should have foreign stocks, natural resources, REITs, international bonds and other investments in your portfolio, Geraghty said. Typically his clients are invested in 12 different asset classes, he said.

If you're way off balance in your 401(k), for example, and being hammered in the market because you're not diversified, you need to proceed cautiously before making any changes. Geraghty said he might advise someone to slowly move money out of one asset class and into another, depending on their age, what other investments or money they have and how long they have until retirement. If you're close to retirement or in retirement, you might want to move faster to rebalance. One thing you can definitely do is consider changing how new contributions to your retirement plan are allocated.

If you're in your 50s, having an overall plan is crucial because you have less time to recover from market downturns. Geraghty said a typical portfolio for a 50-something investor might have 60 percent in equities and 40 percent in bonds and cash.

What if you're considering fleeing to municipal bonds for the safety and tax advantage?

Geraghty favors government agency bonds. He also warns about investing in "revenue" bonds that are issued by agencies created by states to fund a single project such as a bridge or stadium. If the revenue from such a project drops, the bond could eventually go into nonpayment status -- meaning that the agency stops making coupon payments. Stick to general obligation bonds issued by government bodies that have the right to raise taxes, if necessary, to meet their obligations, he said.