Three Tips to Stress Less About Market Volatility
Market volatility can feel like an emotional rollercoaster. One day, you’re celebrating record highs, and the next, you’re nervously checking your balance, wondering if it’s time to sell (spoiler alert: it’s not).
But smart investing isn’t about predicting every market swing—it’s about having a clear, reliable strategy that helps you stay calm and confident, no matter how bumpy the ride gets.
In this article, we’ll cover three practical, data-backed ways to handle market ups and downs, so you can stop stressing about your portfolio and start focusing on living your life.
Tip 1: Focus on the Long Game
Market swings can feel scary. After all, headlines screaming about “historic crashes” or “record highs” are designed to grab your attention (and clicks). However, reacting emotionally to short-term news is a quick way to sabotage your long-term returns.
History tells us that markets bounce back. The average annual return of the S&P 500 since 1957 is around 10%, even though investors have faced crises like Black Monday, the Dot-Com crash, the Great Recession, and COVID-19. Those who stayed invested through these events benefited from significant recoveries and long-term growth.
For example, if you invested just $100 per month over the past 30 years, you’d have over $200,000 today, assuming an average annual return of 10%. Even accounting for inflation, that’s a substantial boost to your financial security—far more than you’d achieve by staying on the sidelines.
Rather than timing the market, focus on time in the market. Staying invested and maintaining a long-term perspective helps you weather volatility and avoid costly emotional mistakes, so your portfolio grows steadily—even through the inevitable ups and downs.
Here’s how you can focus on the long game:
- Automate your investments. Set up automatic monthly contributions to avoid emotional decisions and build wealth over time.
- Limit portfolio check-ins. Schedule quarterly or semi-annual portfolio reviews instead of daily market tracking to minimize anxiety and impulsive actions.
- Think goals, not market swings. Focus on why you’re investing—whether it’s retirement, education, or financial independence—to keep short-term fluctuations in perspective.
Tip 2: Keep Your Cool (and Your Perspective)
Watching your portfolio shrink during market swings can make anyone feel anxious—especially when every news update seems designed to spark panic. However, emotional reactions to market fluctuations often lead to financial setbacks.
Let’s look at the data. Between 1990 and 2023, the S&P 500 delivered an annualized return of 10.21%. If you’d invested $1,000 at the start and stayed invested, you’d now have $24,733.93.
However, what if fear drove you out of the market at precisely the wrong moment?
- If you missed just the single best market day, your return would drop to 9.85%, leaving your investment at $22,202.51. That’s over $2,500 less—all because you reacted impulsively.
- If you panicked and missed the 15 best market days, your annualized return would plummet to 6.82%, turning that same $1,000 into just $8,821.35—nearly $16,000 less.
Those best market days often happen during periods of extreme volatility. So, staying invested isn’t about being fearless—it’s about recognizing that short-term dips are part of the long-term journey.
Here’s how you keep a level head when markets get rocky:
- Tune out the daily noise. Financial headlines thrive on drama, but focusing on your long-term goals helps silence the panic.
- Stick to your investment plan. Regularly review your strategy and goals to reinforce your commitment when times get tough.
- Lean on a trusted advisor. If stress creeps in, talking to a financial advisor can provide the clarity you need to stay grounded.
Tip 3: Diversification is Your Friend
Not everyone reacts the same way to market ups and downs. Some investors thrive on taking bigger risks for potentially higher rewards, while others prefer a more cautious approach.
Diversification helps you find that sweet spot, matching your investments to your risk tolerance and goals so you feel comfortable through all kinds of market conditions.
When you diversify, you spread your investments across different types of assets, like stocks and bonds. Let’s look at the numbers to illustrate clearly how diversification affects returns. Between 1985 and 2023, here’s how different stock/bond portfolios performed:
| Stock/Bond Allocation | Average Annual Return | Highest Annual Return | Lowest Annual Return | Best for |
| 100% Stocks | 12.01% | 38.91% | -40.05% | High-risk tolerance, long-term investors (e.g., tech entrepreneurs with high growth goals) |
| 80% Stocks / 20% Bonds | 10.76% | 34.71% | -32.73% | Growth-focused investors comfortable with volatility (e.g., mid-career professionals saving for retirement) |
| 60% Stocks / 40% Bonds | 9.46% | 30.23% | -24.82% | Balanced investors seeking growth and stability (e.g., couples in their 50s planning for retirement) |
| 40% Stocks / 60% Bonds | 8.19% | 25.87% | -16.27% | Conservative investors looking for moderate growth (e.g., recent retirees needing income but still wanting some growth) |
| 20% Stocks / 80% Bonds | 6.71% | 20.40% | -8.14% | Conservative investors looking for moderate growth (e.g., retirees who need low risk and steady returns) |
| 100% Bonds | 5.26% | 15.12% | -5.18% | Risk-averse investors seeking capital preservation (e.g., individuals on a fixed income prioritizing safety over returns) |
To diversify effectively:
- Evaluate annually: Your risk tolerance and goals change over time. Review and adjust your asset allocation annually.
- Spread widely: Invest across multiple asset classes (stocks, bonds, real estate, etc.) to lower your overall portfolio risk.
- Avoid performance-chasing: Keep a balanced portfolio rather than jumping into trendy investments, which often leads to increased risk and lower long-term returns.
Bonus Tip: Talk to Someone Who Gets It
Even the most disciplined investors have moments of doubt. When markets drop, headlines scream doom, and your gut tells you to sell everything, it’s easy to make emotional decisions that hurt your long-term success.
That’s why the right financial partner makes all the difference. A great advisor won’t pretend to have a crystal ball—because no one can predict the market. What they can do is help you:
- Stay calm when markets aren’t – Investing is emotional, but making decisions based on fear or excitement can derail your strategy. A trusted advisor helps you zoom out and stay focused on the big picture.
- Stick to a plan that actually works – A strong financial strategy isn’t about reacting to every market move—it’s about having a long-term plan that makes sense for your life, and actually following it.
- Make smart adjustments (not panic moves) – Your financial plan should evolve with your goals, not with every news cycle. A good advisor helps you make thoughtful, strategic changes when necessary without the knee-jerk reactions.
Build an Investment Plan That Keeps You Calm Through Market Swings
Market ups and downs are inevitable, but stress doesn’t have to be. The key to long-term success isn’t trying to predict every twist and turn—it’s having a well-structured plan that keeps you focused on the bigger picture.
At Hanke & Apolonio Wealth Advisors, we help investors take the emotion out of investing with strategies built for real life—not just the markets. Whether you need a diversified portfolio that aligns with your risk tolerance, guidance on staying the course during volatility, or a partner who helps you make confident financial decisions, we’re here to help.
Let’s talk. Schedule a consultation and discover how our investment management approach can bring more clarity, confidence, and peace of mind to your financial future.