Long Terms View
First, put market volatility in perspective. Swings in the stock market over a few months or even a few years should not affect a long-term investment strategy. Historically, investing over the long-term has tended to smooth out the bumpy rides that have occurred over the shorter periods of time.
It has often been said that two emotions, fear and greed, are what determine much of the trading in the market. When stocks rise in a bull market, many investors may develop a false sense of security that nothing can stop this continued upward trend. They mistakenly believe that large gains made over a short period of time can be projected into the future indefinitely.
The "flip-side" of the false optimism is the disappointment that may set in when the market drops sharply in one day. In a bear market, many investors may panic as they imagine their nest eggs vanish before their eyes. Some may even sell when the market has gone down on the fear that it could go even lower. In either of these cases, it's important to keep your long-term perspective in mind.