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Mindset Matters - find inspiration to see money in a calmer, more empowering way.
Market downturns are often remembered as moments when people “lost everything,” but the deeper story is usually about decisions made during fear. I still remember my father telling me in the early 2000s that the stock market was dangerous, around the time of the Enron collapse. What was rarely explained back then was that many of those losses came from being heavily invested in a single company, not from owning the market as a whole.
The shift is this: downturns are not signals to exit. They are periods that test whether your structure and understanding are strong enough to let you stay put.
When markets feel uncomfortable, pause before reacting and ask some simple questions:
If the answer is yes, that moment of clarity can be enough to keep fear from turning into a permanent decision.
I build my portfolio so I don’t need to react during a downturn.
When markets fall, I am not scrambling to decide what to do. The decisions were made long before the headlines appeared. I keep a certain amount of my portfolios in “risk-on assets” and some in “risk-off assets” / safe-havens (e.g. money market funds or treasuries).
I keep cash on purpose so I never feel forced to sell stocks at a loss. I structure each account with a clear role so no single bucket is doing all the work. Some money is built for growth. Some is built for stability. Some is there simply to give me flexibility. By flexibility I mean mostly buying when the market is on-sale (anything more than 20% draw-down is great).
That structure means a downturn DOES NOT automatically demand action. It gives me room to sit still…. and more importantly, to BUY THE DIP if I can!
History rewards people who are able to stay invested.
Since 1900, the U.S. stock market has experienced roughly fourteen declines of 20% or more. Living through one always feels horrible. You turn on the TV and all the talking-heads are crying about a “melt-down”. Your friends and coworkers are talking about selling “everything” before they lose more. Your own portfolio is down a lot and you have that knot in your stomach.
Historically, a clear pattern emerges.
On average, the market has taken about 2 years to recover from those declines and reach new highs. Some recoveries were faster. A few took longer. But recovery has been far more common than permanent loss.
The real risk is not the downturn itself. It’s being forced out and missing the recovery. When your portfolio is built to withstand discomfort, time has a chance to compound your growth.
That’s why preparation matters. It removes the need to make decisions in the middle of fear. Don’t you wish someone explained this to you back in high-school?
During a market downturn, success rarely looks dramatic:
I have a close friend who took all his money out of the market after the pandemic crash in 2020. In doing so, he locked in significant losses. He then waited for things to feel safe again and only began slowly putting money back into the market in 2025. By then, much of the recovery already happened, and the losses never had a chance to recover. The loss didn’t come from the downturn alone. It came from exiting, waiting, and trying to find the right moment to return.
The quiet win is not needing to make that decision at all. Staying invested through discomfort often matters more than being right in the moment. You CAN prepare for moments like this long before they arrive.
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