Warren Buffett and Ray Dalio agree on what to do when the stock market tanks

The Dow Jones industrial average fell over 550 points on Friday after a volatile week of trading, as investors continued to fret that a trade war might be imminent.

But for the average person, shifts in the market, even ones as dramatic as the ones we've seen this year, shouldn't be cause for panic. During times of volatility, seasoned investors Warren Buffett and Ray Dalio agree that it's best to stay calm and stick to the basics.

"Don't watch the market closely," Buffett told CNBC in 2016 amid wild market fluctuations. "If they're trying to buy and sell stocks, and worry when they go down a little bit … and think they should maybe sell them when they go up, they're not going to have very good results."

Buffett emphasized that holding onto investments long-term is crucial to having them pay off. "The money is made in investments by investing and by owning good companies for long periods of time," the Berkshire Hathaway CEO told CNBC. "If they buy good companies, buy them over time, they're going to do fine 10, 20, 30 years from now."

Dalio, the founder of investment firm Bridgewater Associates who is worth an estimated $14.6 billion, agrees. Though it's tempting to sell when the market begins to drop, he says, giving in to your fear is not a sound strategy.

"You can not possibly succeed that way," Dalio said at the Harvard Kennedy School's Institute of Politics. "You've got to do the opposite. It's when you're not scared you probably want to sell, and when you are scared, you probably want to buy."

Both investors say that the best way to invest successfully is by not trying too hard to anticipate market fluctuations and by staying calm despite them.

In his annual shareholder letter, Buffett explained that the markets are always going to be volatile, so the best thing any investor can do, regardless of experience, is to keep a level head.

"Though markets are generally rational, they occasionally do crazy things," he wrote. "Seizing the opportunities then offered does not require great intelligence, a degree in economics or a familiarity with Wall Street jargon such as alpha and beta."

He continued: "What investors then need instead is an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period — or even to look foolish — is also essential."

This is an update of a previously published article.

Don't miss: Warren Buffett just won a $1 million bet—and highlighted one of the best ways to grow wealth

Like this story? Like CNBC Make It on Facebook!