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Just when you think that the financial crisis cannot get any worse, the VIX -often called Wall Street's fear gauge and known best by its ticker symbol VIX - index hit an alltime high last Friday, closing at 79.13.

The question thus on everyone's mind is when will the volatility end?

As global financial markets continue to melt away, coupled with fears of a possible recession, worried mutualfund investors watch as their investments and hardearned savings continue to erode away. However before you make the decision to press the "panic" sell button, consider the following two choices:

The first choice is to sell all your investments and hold cash. It is a tempting choice given the current market meltdown. In general, mutualfund investors are known for giving in to the temptation to sell when markets are at a low. Research done on mutualfund flows by financial data providers show that an average investor tends to buy high and sell low. If you decide to sell all your investments now, you would likely be cashing out at the bottom of the market.

Moreover, you will be faced with the difficult decision as to where you should reinvest in the future and potentially risk missing opportunities that may arise from this market. Trying to time the market is a futile effort and the odds are likely to be stacked against you as you allow emotion and fear to drive your decisions.

Your second option is to ride through this market volatility and stick to your longterm plan. We cannot neutralise all of our emotions when it comes to investing. Most investors know that it is best to hold on to their investments in a downturn, but doing so is a different story. My suggestion is to sit tight and stick to your longterm plans. Staying the course would require you to be patient and disciplined and this may even mean turning off the news channels or Internet for a while.

It is important to recognise that the widespread losses experienced already will take time to recover and could get worse before they get better.

Another worthwhile strategy worth mentioning is to consider putting more money into your longterm plan, if you have extra cash on hand. If you purchased mutual funds with capable fund management teams, with solid strategies proven over different market cycles, these attributes should benefit you over the long haul. Core mutual funds have the added advantage of being diversified across stocks and sectors and although the news of some stock going to zero is troubling, the likelihood of core mutual funds being rendered worthless is nil.

If most investors cannot separate emotions from their investment decisions, then one way to approach this inherent investor weakness is to seek the advice of a professional money manager or financial planner. Unfortunately, this option is only as good as the financial adviser you select. Thus, it is important to check out the credentials of any investment adviser that you use. Even with a qualified financial expert, the decision is still up to the investor as to whether to take the advice, or liquidate the investment. Committing to a pure buyandhold portfolio strategy means that, at one time or another, you will always be fighting your own human nature to hit the exits when losses occur.

Benjamin Lim is the head of marketing and business development for Aberdeen Asset Management Thailand.