Another (Better) Way to View Market Volatility

The market’s looking pretty scary these days, right? But honestly, it’s not the turbulence that will get you in trouble. It’s your emotional reaction to it.

Studies show that most investors, regardless of gender, tend to act on emotion, instead of rational thinking, when making financial decisions.

When markets take a tumble, our emotions, especially fear, take over, and we abandon ship, suffering losses.

The emotional reaction also happens in reverse. When the market is on a big run, there’s a tendency to take on too much risk and follow the herd, like so many did during the dot com and real estate booms.

May I suggest another way to view this volatility? Heed the advice of my favorite Wall Street Journal columnist, Jason Zweig: Be thankful that stocks are going down.

“Fear is the best fertilizer for future bull markets,” Zweig recently wrote “Market panics are the natural way overvalued assets come back into line, making future returns more attractive.”

If stocks only went up, Zweig explains, you wouldn’t make much money. “The short-term pain of loss is the price we pay for the potential for meaningful long-term gain.”

Besides, this is an awesome buying opportunity. As Zwieg points out, “If you have plenty of cash and the courage to withstand further declines, other people’s fear could be your cue to act.”

A line from an old Waylon Jennings song comes to mind—something you may want to remind yourself during market turbulence: “Storms never last, do they babe?”

Market volatility, like thunderstorms, won’t last forever. If you can ride out the passing squalls, you’ll be paving the way for long term prosperity. Now, that’s something to be grateful for!

I’d love to know how you’re viewing all this market volatility? Leave me a comment below.

Comments & Feedback

  • Geri Lofgren

    What a great comment “be grateful” the market is going down. If there was nothing else I learned from your Wealth Management course it was not to be afraid when the market drops. But of course I learned so much more and will continue to thank you for giving me the information I needed to take control of my finances. I feel safe and secure as a result.

    • barbara huson

      So wonderful to hear from you Geri! And your last line made me grin from ear to ear: “I feel safe and secure as a result.” May it always be so…you deserve it!!!!

  • Lisa

    I’m noticing during all this volatility that the company VISA has been returning a good net profit despite the stock price being a little bit low.

    It’s true what you wrote Barbara, some people are thriving during this pandemic.

    A part of me would like to invest in this, but a big part of me also remembers the grief credit card companies caused a friend of mine. She was such a life loving person, but the credit card debt was always the big elephant in the room and still is 16+ years later. Wouldn’t it be sweet justice to go from owing money to a credit card company to owning a big chunk of a credit card company? 💳

    While reading a retro newspaper in a coffee shop, I found out that the company is performing well because they have digitalized their business in other countries enabling people to pay their bills online during the pandemic.

    It got me thinking. It’s not credit card companies that are evil, it’s the user behind them who has no control. Just like guns, alcohol the casino and other addictions.

    I’m contemplating buying.

    • barbara huson

      Lisa, you hit the nail on the head. Your friend’s problem wasn’t the evil credit card company. It was her out of control spending. The credit card was showing her where she needed to heal and change. Just like casinos and gun makers and liquor stores. I’m so glad you see that. So if you want to add Visa to your portfolio, do not feel guilty. Visa has made a lot of lives (including mine) so much easier and more convenient.

      • Lisa


        I think that’s what I meant to say. VISA provides other services to people other than loaning credit to people. I don’t believe they are the devil.

        I do think the credit cards 💳 should come with a warning label on them, just like a packet of cigarettes 🚬 and I do think everyone should have to pass an online course, just like a practical test for a driver’s license.

        Also, in some countries you need to save a few grand first, before you’re eligible to receive a credit card. If you’re not patient enough to save a few grand, you’re not capable of paying back a few grand. The American system of a credit score is a bit wack!

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Meet Barbara Huson

When a devastating financial crisis rocked her world, Barbara Huson knew she had to get smart about money… and she did. Now, she wants to empower every women to take charge of their money and take charge of their lives! She’s doing just that with her best-selling books, life changing retreats and private financial coaching.

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