Letting valuation drive asset allocation forces you to study fundamentals.

And understanding that underpriced assets outperform in the long term empowers you to act like a long-term investor.

Market declines are no longer marked with short-term fear, but long-term opportunity.

This is a key change in mindset, as the perhaps most dangerous parts of downturns are psychological.

Fear of further losses can cause an investor to sell out, thereby locking in losses as it is unlikely they will get back into the market in time to catch the rebound.

We have begun to take on not less risk but more as prices have fallen and the risk/reward picture improves.

We still view UK equities as being attractively priced, and US stocks are much more attractive, too.

We like European financials and global energy, as these companies have been hit particularly hard in the sell-off.

Again, we like these assets because we believe their prices will come back, and they have further to come back than assets like technology and health care companies in the US, which have held up much better in this down market.

Being a valuation-driven investor makes you a bit of a contrarian.

We try to be, as business magnate Warren Buffett once aptly put it, greedy when others are fearful, and fearful when others are greedy.

After a long period of being fearful, a silver lining of this crisis is that we can now eagerly look to markets for bargains.

Dan Kemp is chief investment officer, EMEA, Morningstar Investment Management Europe