It’s easy to stay calm when markets are up and headlines are positive. But as any seasoned investor knows, the real test of your financial plan comes during times of uncertainty.
Maybe the market just dropped 5% in a week. Maybe inflation reports are back in the news. Maybe interest rates are climbing, or geopolitical headlines are causing volatility. Whatever the cause, you’re not alone if you’re wondering: Should I be doing something right now?
At VestGen, we work with individuals and families who are serious about building lasting wealth. And one of the most important lessons we share is this: In moments of uncertainty, disciplined action often beats emotional reaction.
Why Market Volatility Feels So Personal
Behavioral finance research tells us that humans feel the pain of loss twice as intensely as the pleasure of gains. So when the markets dip, even temporarily, the discomfort can feel outsized—and urgent.
In fact, DALBAR’s long-running studies show that the average investor consistently underperforms the market by several percentage points annually. Why? Because of reactive decisions driven by emotion, not strategy.
It’s not a matter of intelligence—it’s psychology. That’s why having a clear plan, and a steady advisor, makes such a difference.
What Not to Do When Markets Get Volatile
Let’s start here. In most market downturns, the biggest risk to your financial future isn’t the market itself—it’s how you respond.
Here are three common investor mistakes:
- Drifting from the Plan
In the absence of a structured, long-term plan, it’s easy to chase trends or try to “wait for the bottom.” But trying to time the market rarely works—even for professionals. - Going to Cash Prematurely
Selling out of fear might feel good in the moment, but it often leads to missed rebounds. Some of the market’s biggest up days happen shortly after the worst ones. - Making Isolated Decisions
Reacting to headlines without considering the broader context of your portfolio, taxes, or long-term goals can result in unintended consequences.
What a Thoughtful Approach Looks Like
- Review, Don’t React
Start by assessing where you stand:
- Has anything changed in your personal life or financial goals?
- Do you still have the right time horizon for your investments?
- Is your current allocation aligned with your risk tolerance?
Your answers will guide your next steps far better than the news cycle.
- Rebalance if Needed
Volatile markets can throw off your portfolio’s target allocation. Rebalancing helps bring your portfolio back in line with your goals, often by buying low and selling high—in a structured way.
- Tax-Loss Harvest
Down markets can provide tax planning opportunities. Selling investments at a loss to offset gains elsewhere (without abandoning your strategy) can improve after-tax returns.
- Revisit Your Cash Reserves
A strong liquidity buffer can help you ride out market volatility with confidence. If you need to replenish your emergency fund, now is a good time to do it.
- Talk to Your Advisor
Even experienced investors benefit from a second perspective. A conversation with your advisor can help contextualize what’s happening, clarify your plan, and prevent impulsive moves.
How VestGen Supports Clients in Uncertain Markets
Our advisors help clients:
- Stress-test portfolios for various market scenarios
- Develop personalized investment strategies based on goals, not predictions
- Implement tax-smart rebalancing and loss harvesting
- Stay anchored to long-term financial outcomes
We don’t believe in one-size-fits-all advice. We believe in building plans that help you make wise decisions—especially when the markets make it hard.
Volatility Is Normal. Your Response Is What Matters.
It’s perfectly natural to feel uneasy when markets get choppy. But with the right plan, the right support, and a clear understanding of your goals, you don’t need to panic.
You just need a process.
If you’re wondering how recent market conditions affect your long-term strategy, or if your current advisor hasn’t reached out, let’s talk. A VestGen advisor can help you navigate with clarity and confidence—in any market.