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If you’ve checked your portfolio over the past few weeks, you probably don’t like what you see. The markets biggest winners over the past 18 months have suddenly seen the bottom falling out. The S&P 500 has thus far experienced modest losses, but the tech-driven indices are already in or near correction territory.

For a lot of investors, this may feel especially painful. Seeing that these were almost the only themes working out the time, many overweighted their portfolios with not just funds, such as the Invesco QQQ ETF (QQQ), they also targeted individual stocks, such as NVIDIA. A lot of these folks who bought at or near the top of the cycle are probably having buyer’s remorse.

It doesn’t, however, look like investors are panicking or rushing out of tech stocks.

If you look at ETF flows, there has been money moving out of tech ETFs broadly, but not to any unusual degree. QQQ has seen some choppy daily flow numbers, but nothing that would indicate a mass exodus. On a proportional basis, however, we are seeing ETF investors shifting into small-cap ETFs.

The VIX touched 18 this week, but that’s only the highest reading since April. Granted, the Nasdaq 100 volatility index got up to 24, its highest reading since October of last year, but the market action overall has been relatively contained.

That’s because the last three weeks hasn’t been a massive sell-off. It’s been a massive rotation, largely within equities.

Small-caps? Significantly outperforming. Dividend stocks? Significantly outperforming. Low volatility stocks? Significantly outperforming. Even long-term Treasuries have outperformed the S&P 500 by a modest margin.

But it’s the fact that Treasuries haven’t significantly outperformed stocks that leads me to believe that equities are still in charge here. Even though the sectors leading the way are completely different.

If You’ve Learned Something About Yourself, Adjust

Even if ETF flows haven’t necessarily followed the direction of stock prices yet, a lot of investors are probably asking themselves what comes next. For many, that means buying after prices have gone up and selling after prices have gone down, leading to sub-par returns over the long-term.

Instead, investors should be using what’s happened over the past three weeks to reassess their personal situations. Everybody is a risk seeker when stocks keep going up. When they go down is when they usually find what their real risk tolerance is.

If you find yourself in that group, consider diversifying your portfolio. You may be more heavily invested in the magnificent 7 stocks than you think, even if the core of your portfolio is the S&P 500. Here are a few ETFs to consider if you want to change the composition of your investments:

• If You Want To Lower Your Risk, But Remain In Large-Caps: Invesco S&P 500 Equal Weight ETF (RSP)

• If You Want To Make A Modest Addition Of Small-Caps: Vanguard Total Market ETF (VTI)

• If You Want To Add Some Defense: Invesco S&P 500 Low Volatility ETF (SPLV)

• If You Want To Take Some Risk Off The Table: iShares Short Treasury Bond ETF (SHV)

• If You Want To Add In Some Downside Protection: Innovator Laddered Allocation Power Buffer ETF (BUFF)

• If You Want To Add 100% Downside Protection: Innovator Equity Defined Protection ETF (TJUL) (but read THIS first!)

Adding any of these to a core S&P 500 position will add either diversification or a degree of risk reduction. You shouldn’t think of investment decisions as only having two outcomes - get in or get out. Instead, make gentle pivots within your portfolio to adjust your risk/return profile. If you’re driving down the road and finding yourself slowly veering off and on to the shoulder, you don’t crank the wheel all the way over to the left. You slowly adjust to bring yourself back into your lane. The same principle applies to investing.

Above all, be honest with yourself about how you feel about risk. There’s a quote that says you should only invest in stocks to the level where you can sleep comfortably at night. It’s a good rule to follow.

Consider Buying The Dip

If you’re shopping for clothes and you see a shirt with a 15% off tag, you’d probably be more interested in buying it. Why doesn’t the same principle apply to stocks?

It’s the one thing where people want to buy more after the price gets higher and avoid when it goes on sale. If you have some cash sitting on the sidelines, consider using some of it to buy the stocks that are on sale right now. Sure, you may not be buying at the bottom, but you won’t know what the bottom is until after it happens. But locking in a purchase when prices are down 10-15% can be one of the easiest ways to improve your portfolio’s return long-term.

It takes discipline though. The investing public will tell you repeatedly and collectively that things will get worse after prices go down. Very few will tell that this is an opportunity. It’s the latter, but it takes courage (and making sure it’s still consistent with your long-term goals).

Final Thoughts

It’s important to remember that corrections like this are regular and normal. In fact, they probably happen a lot more frequently than you think!

A 10% correction in the S&P 500 happens roughly two out of every three years. A 20% bear market happens roughly once every four years. These aren’t once in a generation type events that wipe out families completely. They’re declines that come with the turf when investing in risky assets.

If the tech correction we’re experiencing right now still makes you feel a little sick, re-evaluate your situation and consider making slow and steady changes to your portfolio to reflect this. At some point, stock prices will move higher again. They have at every point in history.

You just need to risk manage your portfolio so that you’re comfortably creating long-term wealth.