As Warren Buffet famously said, “The first rule of investing is don’t lose money. The second rule is don’t forget rule number 1.” But when you’re watching major indices decline rapidly over days, will Buffet’s word prevail or will the urge to hit the sell button rule?

Conceptually, many investors do understand why panic selling is never a good idea. You not only lock in what was originally a paper loss but also miss out on the market recovery. Case in point: Over any 20-year period, the US stock market has never lost money, even after considering the 2008 financial crisis or the 2000 dot-com bubble burst. But when the stock market goes into a freefall, there’s no guarantee investors will react to the volatility the way they think they will.

That’s why it’s so important to understand your own risk tolerance and figure out your risk profile. All investments come