One silver lining of down markets is the ability to realize tax losses. By selling out of positions that are trading at a price below your cost basis, you can take a loss and use it to offset capital gains. If you don't have any capital gains, you can use the tax loss to offset up to $3,000 in ordinary income.

You often hear about tax-loss selling at year-end, because you have to realize losses by Dec. 31 if you want to use them to lower your tax bill for that year. But there's no reason that investors need to wait until the year's final months to sell a stock, fund, or ETF at a loss. If your holding has dropped in value--or, in the case of late 2015 and early 2016, the whole market has--realizing losses can be valuable no matter what the calendar says.