Coaching
Following the stock market these days will make your head spin. The volatility is real, and the stress is even more so. It’s like the fourth quarter of a big game, and the underdog team is suddenly running up the score. Nobody knows if the next play will be a touchdown or a fumble. You’re on the edge of your seat, fists clenched, eyes wide open, heart racing. Just waiting to see what the next play will be.
In a volatile market, prices swing, dramatic headlines fill your feed, and emotions threaten to hijack your careful financial game plan. The stakes are high, but a good coach knows that remaining calm, staying disciplined, and sticking to fundamentals will win the long game. If the market takes a dive, avoid getting sidelined with panic. Follow these four tested strategies from The Coach to maintain sanity and clearheadedness.
…A good coach knows that remaining calm, staying disciplined, and sticking to fundamentals will win the long game.
1. Trust your playbook
Your well-thought-out financial plan is your playbook, so make sure you have one that fits your goals. You wouldn’t throw out a playbook and start winging it with minutes left in the game, so why would you abandon your financial plan when things get rocky? A good plan will be unique to you and will take into account your time horizon, long-term and short-term goals, risk tolerance, and security. Review it when things get rough, but don’t overhaul it every time the chains move.
2. Tune out the noise
When the crowd is screaming “sell!” from the stands, it’s easy to get swept up. But champions don’t follow every crowd chant. In fact, their ability to focus and tune out the noise is part of what makes them great. Remember, the media cycle loves volatility because every small fumble creates a big, dramatic headline. Rather than following the whiplash advice of so-called market experts, trust your dedicated advisors, the long-term metrics, and your own discipline. Review fundamentals, tune out the sidelines, and focus on what makes sense for your portfolio. The rest is just noise.
3. Practice resilience
Athletes train their bodies and minds. In a volatile market, a well-trained mind is your most powerful asset. Look at these ups and downs as training moments, so embrace them to gain strength and resilience. Using the benefit of hindsight, look back at past financial crises like those in 2008 and 2020, and study how smart investors acted and reacted. Build healthy financial routines like regular check-ins, risk reviews, and designated “cool-down periods” before making major financial moves. Like in fitness, discipline reduces impulsive behavior, and trading on impulse is rarely a winning play.
4. Activate your defense and your offense
You know what they say: offense scores points, but defense wins championships. The same can be said when navigating a volatile market. Good investing means balancing exciting growth opportunities with necessary security. Diversify your lineup with stocks, bonds, cash, and even alternative assets where it makes sense. Maintain an element of liquidity so that you avoid panic-selling when markets take a turn. It’s important to hold the line, but every so often it makes sense to bring the blitz.
Bottom line
A volatile market isn’t always a reason to panic. With a clear game plan, mental toughness, and a balanced offense and defense in place, you can maintain control and stick to your financial playbook. We’ll help you calibrate your risk, adjust as life changes, and keep focus on your goals, security, and long-term success. You can’t control the markets, but you can control your reaction to them.
