Don't let the Wall Street roller coaster catch you by surprise

Stay the course; don't panic -- that's the general advice about your 401-K. But But be prepared for anything in the dog days of summer. .

Michael Smith at Houston's STA Wealth Management says wild stock swings, like we saw last week, won't catch a disciplined investor off guard.

"Most of Wall Street's on vacation, so you have a lot of light trading and a lot of different things can happen in August, but as for an investor, you should be preparing for the volatility we've been experiencing since the fourth quarter of last year and as we recently saw in the last few weeks."

In recent years August has been the worst month for stocks but Smith says you can't count on upturns or downturns and you won't have to worry if you stick to your plan.

Some doomsayers are forecasting a recession and Smith says if you're worried about a recession you can prepare.

"I would have more liquidity and I would lighten up a little bit, maybe if I'm 60-40 in terms of stocks to bonds, maybe I bring that down a little bit and then have a disciplined strategy for how you would sell and exit a position if more volatility persists."

But Smith says he's not expecting the bottom to fall out of the stock market. He says if you're a disciplined investor and you stick to your plan, you'll be all right.

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