It's been a rough start to August for financial markets, with US shares suffering the biggest decline in almost two years on Monday. A sharp bout of risk aversion has hit, with bond yields lower, growth assets selling off aggressively and volatility measures surging. The Japanese sharemarket has fallen 20 per cent in just three days, something we haven't seen in data going back to 1949. The S&P 500 in the US is down 8.5 per cent from its peak three weeks ago, while the tech-heavy Nasdaq has fallen 13.1 per cent. Interest rates are down sharply amidst the nervousness, which has seen bonds and fixed income rise solidly amidst the turmoil in other asset classes. Let's recap what's driving the volatility and offer some tips for investors wondering what to do.