This is not the time to panic and do something that you will regret later. Panic-based decision-making is never a good idea, so don’t let emotion lead you to make quick and rash decisions. Selling out after a 20% decline is a recipe for locking in your losses, likely forever. I highly doubt that if you sell out now, you will want to buy back in when things are lower. You will likely be stuck waiting it out until long after the recovery is underway.
Let’s remember what happened in 1987 as one example of a significant decline in a very short time due to a quick shock. In 1987 the stock market declined 30% from its high to its low over three months. After that, the markets went on to rally for the next 13 years without another 30% decline.
Remember, your broadly diversified portfolios are designed to participate in market gains but also to minimize loss as much as possible during the downturns.