Today's financial headlines are enough to make investors lose sleep worrying about the fate of their portfolios.

Credit markets are whirling from a subprime housing crash, the dollar is weak, interest rates are going down, a recession may be looming, and now the stock market is on a downward spiral.

Yesterday's plunge in U.S. markets and similar events around the globe have prompted shareholders big and small to wonder if this is the dawning of a long-term bear market or just a healthy short-term correction.

"It could be either," said Kim Caughey, a senior equity analyst for Fort Pitt Capital Group in Green Tree. "If I knew the difference I'd probably own a small island called North America."

Either way, experts say now is a good time for individual investors to take a closer look their retirement and college savings accounts -- such as 401(k)s, IRAs and 529 plans -- to make sure they're diversified and have a long-term strategy.

Most importantly, brokers are urging investors to keep a cool head, even if their account balances have dropped, and try to consider the silver lining this broad market selloff might present.

Paul Brahim, executive vice president of BPU Investment Management, Downtown, said panicky investors are likely to make common mistakes such as suspending all future purchases of stocks or selling the stock they have.

"It's not often that opportunity kicks down your door, grabs you by the collar, screams in your face and says 'Hello. I'm here.' But that's what's happening now," Mr. Brahim said. "It's a buying opportunity for U.S. equities."

Stock markets have been in full retreat this year over economic fears stemming from the subprime collapse. The Dow Jones industrial average is down 8.8 percent, the S&P 500 Index has lost 9.8 percent and the Nasdaq is down sharply, losing 11.8 percent since Jan. 1. Locally, the Post-Gazette/Bloomberg index, which measures the performance of Pittsburgh-area companies, has shed 13 percent this year.

Anyone considering selling stock and buying U.S. Treasury bonds may want to consider that bond prices have soared in recent weeks as investors have shifted money to safer assets.

"The only thing worse than selling your stocks now would be using the proceeds to buy bonds," said Eric Tyson, author of "Investing for Dummies" and "Let's Get Real About Money." "You would be selling stocks low and buying bonds high."

Investors who already have balanced their portfolios with bonds may not have experienced the wild swings seen by those who only own stocks.

But even if someone is close to retirement, financial advisers agree that the worst time to sell stocks is when the market drops.

"People in retirement should be utilizing their cash reserves right now to meet their income needs and not pull cash from the portfolio while it's down," Mr. Brahim said. "They've got to let portfolio values recover before they do that."

Economist and bestselling author Paul Zane Pilzer said the panic on Wall Street has not reached Main Street and he doubts it will.

"This panic is built not on an economic downturn, but some very bad decisions made by some greedy lenders," Mr. Pilzer said. "It's not affecting people's employment, productivity or consumption."

But he believes there is cause for small investors to be concerned.

"People should be watching their portfolios very closely because this economic change will have many winners and losers at the same time," Mr. Pilzer said.

When markets are doing great and more people are making money, investors tend to abandon a well-thought-out diversified strategy for their investments. When the market turns sour, they're in danger of letting their emotions rule.

"Knee-jerk reactions are what will devastate a portfolio," said Greg Womack, a certified financial planner with Womack Investment Advisers in Edmond, Okla. "When there's blood in the streets, it's not the time to sell, but buy."

Michael Cohn, chief investment strategist for Atlantis Asset Management in New York, said anyone with cash on the sidelines should be buying high-quality large-cap companies with lots of international exposure.

"I'm looking at companies with at least 30 percent to 40 percent of their sales coming from overseas," Mr. Cohn said, adding that he would raise the percentage of assets non-correlated with the U.S. dollar in a portfolio to almost 50 percent.

Asset classes non-correlated with the dollar include commodities, energy, crude oil and precious metals such as gold and silver, which have gained value as the U.S. dollar has suffered a loss in purchasing power.

Ric Edelman, a Fairfax, Va., investment adviser and author of the book "Lies About Money," said if investors have an effective strategy, then what's happening in the stock market now should not cause them to panic.

"The stock market occasionally behaves this way," Mr. Edelman said. "Since 1900, the stock market has experienced a decline of this type [20 percent] once every two years.

"The last time this happened was five years ago. We are overdue. So, instead of asking why this happened. The question really is, what took so long?"

While it's hard to ignore the gory headlines, investors should be looking at the longer horizon, said P.J. DiNuzzo, president of DiNuzzo Investment Advisors Inc., in Beaver.

"This will effect the everyday investor's 401(k) temporarily, but they should continue to make regular contributions," Mr. DiNuzzo said.

"The tendency with some individuals is to slow up on their contributions during market downturns, which is exactly the opposite of the recommended strategy."