LONDON -- The FTSE 100 (FTSEINDICES:^FTSE) is edging ever closer to falling back below the 6,000-point mark, just weeks after it hit a 13-year peak of 6,840 at the end of May.
The latest cause for concern comes from China. The country's central bank is entering into talks with commercial banks about improving their liquidity management amid the government's plan to tighten credit conditions on lending.
The end of last week also saw the FTSE plummet following Ben Bernanke's statement that the U.S. Federal Reserve would look to end its stimulus package in the summer of 2014. The last time the index was this low was back in the first week of January.
However, here at the Fool, we've long held the notion that it is important to keep your head in turbulent times: Volatility in the markets isn't a new phenomenon, and headline-driven share-price plunges more often than not correct themselves over time. That's why we advise against "fad" stocks -- shares that are the "Next Big Thing" one moment and are down in the doldrums the next.
Instead, we look at big, reliable, cash-flow-generative companies, which will still form a central part of your portfolio in the years to come. In fact, how about one that offers a solid income yield of about 5%? The company has been declared "The Motley Fool's Top Income Stock For 2013." Want to find out more? Just click here to download the report -- it's completely free and will be sent to your inbox immediately!
Secondly, we recommend firstly buying shares with money that you don't need for at least three to five years, which means that you can avoid the heartbreak of pulling out your investment in a downturn, all while collecting a decent sum in dividends over that period.
In other words, as the U.K.'s premier index continues to be unsettled: Keep Calm And Carry On.
Sam Robson has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.