It is agony being an investor these days. By April 2025, stocks had lost more than $11 trillion since the beginning of 2025. The markets continue to careen between hope and despair. One day everything seems like it will be okay…the next, your net worth will never recover. You hear plenty of sensible suggestions (diversify your portfolio…buy your favorite stocks on sale) and lots of well-meaning advice (avoid panic…don’t sell), but none of it actually makes you feel better.
Market downturns are scary. They ignite so much fear that even if you have a long-term investment plan and know the right things to do, you still can wind up making bad investment decisions.
Bottom Line Personal spoke to a panel of our top financial advisors and psychologists who specialize in the mental and emotional aspects of investing and financial decision-making. Here are their major takeaways…
This time is not different. Plummeting markets feel like the end of the world—but that’s the way they naturally behave. They surge and sell off in massive cyclical swings that can be jolting. Data over the past half-century shows that a drop in the stock market of at least 5% happens every year…10% to 20% once every 18 months…and 20% or more every five or so years. And yet the stock market always recovers—the US has a remarkably resilient economy. As it continues to grow, so do the profits of well-managed US companies. Over time, stock prices follow.
Give yourself a break. The anxiety and uncertainty you are feeling is completely valid. It’s not weakness or ineptness. It’s the way we are cognitively built. In dangerous situations, the more primitive areas of our brains trigger physiological stress responses such as increased blood pressure, muscle tension and sense of urgency—all advantageous if you see a bear in the woods, but not as effective in modern capital markets when the bear shows up in your retirement accounts.
Figure out how to cope. Market crashes and downturns themselves are not the cause of poor long-term investment performance. The S&P 500 has managed a 9.6% annualized return over the past century despite enduring 27 bear markets. The real cause of poor performance: Your inability to manage your emotions in response to turmoil.
Here are seven powerful but simple hacks our panelists use to keep their heads and portfolios in the game. These moves will allow you to gain some leverage over your feelings…think more clearly…and better protect and grow your nest egg.
Adam Kol, JD
The Couples Financial Coach
I slow everything way down. During a market crisis, we start to problem-solve right away. We check our portfolios obsessively and execute panicky trades without first examining our own state of mind or even what’s going on with our body. A deep-breathing exercise like Box Breathing gets your nervous system under control before you act on a compulsion. What to do: Inhale through your nose to the count of four until your lungs are full…hold your breath for a count of four…exhale through your mouth for a count of four…hold your breath for a count of four. Repeat the process. Calming yourself this way makes it easier to use the analytic part of your mind to handle an unexpected event. Another way to ground yourself and feel more focused: Be conscientious about your inner dialog. Instead of thinking to yourself, I’m going to lose everything, think, This downturn could set my plans back a year or two. Instead of thinking, I’m taking a huge loss on this stock, try, I’m repositioning my portfolio and harvesting a capital loss for my taxes.
I cope ahead. If the stock market is down, try to imagine a near-future in which the downturn gets worse. Project how your long-term plan will fare in a worse-case scenario, and anticipate what emotions you would experience. Leaning into the pessimism sounds counterintuitive, but it helps in multiple ways. If the stock market continues to fall, you avoid spiraling because at least you know your portfolio can survive and you’ll be okay. If the drop is less than expected, you feel better despite your existing losses.
Adam Kol, JD, is a certified financial therapist, tax attorney and former financial adviser. He is CEO of The Couples Financial Coach, a practice that provides financial counseling for couples, Miami. CouplesFinancialCoach.com
Frank Murtha, PhD
Financial Counseling Institute
I allow myself to make a few suboptimal investment trades. The hardest part about a market crash is the feeling of helplessness. You see the rest of the herd running, and you’re just standing there frozen. There’s a powerful urge to take action to regain a sense of control. Rather than let this pressure build until you make some big, rash decision, give yourself permission to trade a tiny percentage of your portfolio even if it’s probably a mistake. Or adjust your long-term portfolio allocation of 60% stocks and 40% bonds to 55% stocks, 40% bonds and 5% cash. Small moves can go a long way to satisfying large emotional needs without causing lasting damage.
I watch a video of myself explaining my investment goals and long-term strategy. When you start to catastrophize about market downturns, you need to get outside the echo chamber of your own head. In the past, I used to reread a copy of my investment plans, but that didn’t provide enough emotional ballast. So now I look at a short motivational video that I recorded on my smartphone about how I’m invested and what I want to accomplish. It’s also important to address your fears and impulses directly in the video. Say, “Look, I know you are freaked out about how much money you are losing. It would feel great to go to cash until it’s safe again, but that will just lock in your losses and you’ll miss the rebound. You’ve got this.”
Frank F. Murtha, PhD, is founder and president of the Financial Counseling Institute, a consulting firm that specializes in helping financial advisors apply behavioral finance strategies to their practices, Scarsdale, New York. He is coauthor of MarketPsych: How to Manage Fear and Build Your Investor Identity. FinancialCounselInginstitute.com
Jack Forehand, CFA, CFP
Validea Capital Management
I disable the algorithmic feeds on my social media. Nothing stokes investor fears more than doomscrolling through a stream of news, posts and clickbait about the stock market and economy on major media platforms such as Facebook and X (formerly Twitter). It’s insidious because the software algorithms on these sites are engineered to push you into a state of hyperarousal and keep you engaged as long as possible. You could erase these apps from your phone to make them less tempting, but it’s hard to give up social media because it’s where you go to relieve stress and get a respite from your day. Instead, I try to reduce the influence of the algorithms on what I see. For instructions on how to alter recommendation algorithms on different platforms: PCMag.com/how-to/feeds-full-of-junk-how-to-reset-your-social-media-algorithms.
Jack Forehand, CFA, CFP, is cofounder of Validea Capital Management, an investment advisory that offers well-known strategies based on the work and writings of investment gurus, West Hartford, Connecticut. He cohosts the podcast, Excess Returns, which explores practical and psychological aspects of investing. Validea.com
Keith Fitz-Gerald
One Bar Ahead
I make sure to get “three-axis” exercise. These are activities like motorcycle riding and dancing that require you to move muscle groups in three planes of motion (forward and backward, side to side, up and down). Reason: Complex movements that require changes in angle and direction force your brain and body to coordinate and work together. It’s the most effective type of exercise to take your focus away from your finances, reduce your anxiety and reinvigorate yourself mentally and physically. The more the markets move around, the more I want to ride or dance.
“When in doubt, zoom out” Panic always shrinks your perspective and time horizon. You’re compelled to stop the negative feelings as quickly as possible, no matter what the cost. I recapture that lost perspective and a more rational state of mind by visually zooming out whenever the markets get nasty. What to do: Pull up a historical performance chart of the S&P 500 on Marketwatch.com or Google.com/finance. Notice how it climbs in a long curve upward to the present. The 2000 dotcom crash and 2020 pandemic bear market are short-term blips. Use the chart to put recent downturns into perspective as well. Example: Over the course of one week in April 2025, the S&P 500 plunged 15% to 4,835. But when you expand the timeline on the chart, it doesn’t feel like such a devastating setback. Innovation has never failed to produce profits over time. This year, the S&P 500 retreated back to the level it was in April 2024. This, too, shall pass.
Keith Fitz-Gerald is a consultant for professional wealth managers who also publishes 5 with Fitz and One Bar Ahead. He is a frequent guest on Fox Business Network, CNBC and other networks. KeithFitz-Gerald.com
