Oh, spit!

OMG!

The sky is falling!

Stop. To steal a line from Cameron Crowe's 1989 Say Anything: "You must chill. You must chill."

Yes, I understand that most any market average you look at is down 2% or more today. I get it. Sirius (NASDAQ:SIRI) is down 2.6%. Yahoo! (NASDAQ:YHOO), 3%. Starbucks (NASDAQ:SBUX), 3.5%. Heck, one of my own stocks -- TheStreet.com, (NASDAQ:TSCM) -- is down 15%.

Yet if you're reading this, it means I'm still typing. I haven't jumped out of any windows (not that it would help matters any. I'm on the ground floor.). That sort of dramatic overreaction doesn't help. Panicking as your stocks plummet won't slow their fall, and it won't salvage your portfolio -- just lock in your losses.

Well, what should we do?
You should thank the good Lord (or your deity of choice) for today. For providing you an object lesson in the volatility of the markets.

From time to time, we all need to be reminded that asset prices can go down as well as up. Otherwise, we might do something stupid -- like, say, pay 3,533 times trailing earnings for a share of Salesforce.com (NYSE:CRM). Or buy a $200,000 house for $300,000, finance it with a no-money-down subprime ARM mortgage at 2% with a six-month balloon payment, and then wonder why we can't afford the mortgage when the rate resets to 6%, and our monthly payments suddenly triple.

Hypothetically speaking, and present company excluded, of course.

No, no -- what should we do about the stock market?
Oh, right. Well, just keep on doing what you've been doing. I did say "present company excluded," right? So keep collecting and depositing your paychecks. Researching high-quality stocks. Buying shares at a significant margin of safety. And purchasing no more of any given stock than you can afford to lose. (Just in case your research is off a bit.)

Once you've got that down, though, it's time to get greedy.

Greed is good
See the opening lines of this column up above? A lot of investors are saying things like that right now. Even the pros are panicking. The hedge-fund types? They're worrying about making their quarterly numbers, and they're selling out of positions to stop the bleeding.

Meanwhile, you should consult your stock "wish list" -- you've drawn one up, right? -- and see whether today's panic selling has pushed any of your favorite stocks down below your hoped-for buy-in price. Today just might be your lucky day.

So while the so-called Wise Men on Wall Street are busy selling their favorite stocks, you should be marshalling your pennies, updating your buy list, and deciding how far Cisco (NASDAQ:CSCO) and Google (NASDAQ:GOOG) have to fall before you'll be willing to hop in.

Further fearless Foolishness:

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Fool contributor Rich Smith owns shares of TheStreet.com. Sadly, The Motley Fool's disclosure policy forbids him from buying any more of those shares for at least 10 days after this column is published.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.