Markets are flummoxed as to the variety of risks right now, and it is just unclear how aggressively if at all the Fed and Biden are going to respond to the economic threats. There are two ways to capitalize on the current dip that is hitting your portfolio. The first is tax-loss harvesting; these risks are ones that are more than a month long which could give you the opportunity to repurchase the drops you made in the upcoming months. For those investors who feel adequately equipped in the tax-loss harvesting space, rebalancing is the main tool. That is if your portfolio has lost 10% value inequities with the drops, then up your share to meet the ratios you were at pre-dip. Once stocks have rebounded you can capitalize and re-tool in the opposite direction to maintain the portfolio balance you want in order to serve your risk preferences.

Finsum: Don’t sit during the volatility, but don’t sell off unless you are going to capitalize on the tax efficiency in your portfolio.