If you feel like you need to take action when markets are volatile, you’re not alone. Here are 6 tips for taking action without hurting your long-term goals.
Financial management

6 simple ways to take action in your financial life without hurting your long-term goals

If you feel like you need to take action when markets are volatile, you’re not alone. Here are 6 tips for taking action without hurting your long-term goals.
4 minute read
  •  
May 13, 2020
Financial management
Prioritizing goals
Article
Page
Investor goals
Market volatility

Scientific studies have shown that the human brain really likes to feel in control. We’re built to take action to protect ourselves and the people we love when signs point to trouble.

That’s why when markets become volatile, it’s natural and human to feel like you need to take action and “do” something–anything–to stay in control and protect your financial interests. You might feel anxious or worried. Don’t worry; you’re not alone in feeling that way.


Taking action during uncertain times may help you feel more confident about the way things will turn out. That said, if you feel like you need to make changes to your portfolio, it’s important to make sure that the action you take won’t put your long-term financial goals in jeopardy.

Here are some things you can do to feel in control without losing sight of the bigger picture:

Run some numbers

If you feel you have to do something, consider starting with your calculator. Numbers can give you a rational way of framing things that can settle some of those anxious feelings. For example, you can analyze how market conditions have affected your portfolio and compare it with the expectations you had based on your risk tolerance. Or compare your current asset mix with your target and rebalance if it differs by 5 percentage points or more.

Speak the language of action

Describing your strategy as “staying the course” or “doing nothing” may make you feel you’re not doing enough. Instead, describe what you’re doing as fighting the impulse to get out of the market or giving your portfolio an opportunity to rebound. You’re trusting your mix of assets to get you through market ups and downs, and that takes mental strength. Give yourself credit where it’s due.

Talk it over

Consider sharing your plan of action with others. Take a look at the Vanguard Blog for inspiration. When other people show support for what you’re doing and chime in that they’re doing it too, it can make you feel good about your choices. Helping others when they have questions can also go a long way toward building your confidence.

Take comfort in history

So far, every market downturn in history has been followed by a rebound. We don’t know when it will happen or how big it will be, but there’s good reason to believe that better times are ahead.

Think about what you can control

If you’re saving for retirement, you may be able to control how much you save or how long you can save (if you have a retirement date in mind). If you’re retired, you may be able to adjust the percentage of your portfolio you withdraw during a market downturn.

Your spending habits are within your control too. Of course, it’s probably not realistic to expect that you’ll start clipping coupons, switch to generic brands, and skip your afternoon coffee run all at once. Try cutting down your spending in just one area at a time to see what works best for your life.

We recognize that this is your portfolio, and you control your asset mix. We don’t recommend changing your asset mix in response to market movement, but if you’re determined to make a change to your portfolio, make it a small one. Some examples of small things you can do: Direct one of your stock funds’ investment earnings to a bond fund, or change the asset mix of a single account rather than your entire portfolio.

Lean in

You’re part of the Vanguard community of investors. Lean on us to provide you with the leadership you need to make it through uncertain times. Trusting an expert to bring order to a situation that feels out of control can help you ease anxious feelings.

Most Viewed

Ready to invest? See how to open an account
Start with this step-by-step guide to opening a personal investment account, such as a general investing brokerage account or an IRA.
How SECURE 2.0 reforms affect retirement plans
An omnibus bill signed into law on December 29, 2022, has wide-ranging impact on retirement plans and participants.
Our 2023 economic and market outlook and you
Ryan C. Murray, a Vanguard senior financial advisor, shares his thoughts on how inflation and recession expectations and developments in fixed income and equity markets could affect your portfolio.
Introducing the Vanguard Multi-Sector Income Bond Fund
Learn how our new multi-sector bond fund can be used to complement a core fixed income position in your portfolio.
Vanguard economic and market outlook for 2023: Beating back inflation
Our base case for 2023 includes a global recession brought about by policymakers’ efforts to control inflation.
Who owns Vanguard?
Who owns Vanguard? Learn more about the only investment management company owned by investors—and how this distinction keeps us consistently focused on investor needs first.

All investing is subject to risk, including possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss.