How to Deal with Market Declines

The market has been going up for so long, perhaps we’ve forgotten what it feels like to live through a downturn. The most important thing is: sticking to your plan NO MATTER WHAT the market does. We tend to overcome more easily the things with which we have some experience. For example – taking a trip to the grocery store. We don’t turn around just because we hit a red light. We drive all the way there, park, shop, and drive all the way back. Just like the grocery store, there are many things you do all the time. You complete them with ease despite facing barriers along the way.

It isn’t so when we deal with the ups and downs of the stock market. Why is it that we forsake our future savings so quickly when we hit a speed bump, such as a market decline? We shout, “this isn’t working! I’m out of here!” and then we sell all our stocks. 

The thing is – we don’t really know what the next market downturn will look like or feel like. We’ve lived through some, we’ve read about others. And we forget the feeling. As human beings, we are REALLY good at forgetting the pain of the past. Even if we have some experience, every downturn is a new challenge. We assume the absolute worst: this time is different. We make the market decline mean something that makes us quit: “I’m a failure for investing at all” or “I’ll never recover from something like this, why bother”.

In order to keep from feeling negative emotions from investing, we deal with the uncertainty in a number ways:

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Who do you want to be during a down market? Someone tough as nails, ready to conquer and stick with the plan? I know I always feel better after accomplishing something hard than after taking the easy road.

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