The first big drop I lived through with real money invested, I remember more in my stomach than in numbers. Every morning I’d open the app, see the portfolio a little redder than the day before, and feel I had to do something. Eventually I did: I sold almost everything. That night I slept well for the first time in weeks.
A few months later, the market had climbed back. I hadn’t, because I was out. I’d turned a temporary drop into a permanent loss.
What I understood too late
I didn’t get it wrong for lack of information. I knew perfectly well that markets go up and down. I got it wrong because I decided at the worst possible moment: scared, rushed, staring at a screen. Our brains feel a loss far more intensely than a gain of the same size, and in the middle of a crash that alarm drowns out everything else.
The lesson was a humbling one: I couldn’t trust myself in the middle of the storm. So I had to decide beforehand.
My one-page plan
On a calm, ordinary day, I wrote down four things:
- What this money is for and when I’ll need it. If the answer is fifteen years from now, this month’s drop changes nothing.
- How I split it, in simple percentages I actually understand.
- What I do if it falls 20% or 30%: nothing different. Keep contributing as usual.
- When I do change the plan: only if my life changes (job, family, goal), never because the price changes.
Plus one extra rule: if I feel the urge to sell, I wait a week and reread the page before touching anything.
What changed
The next drop came, the way they always do. Same knot in my stomach, but this time I didn’t have to figure out what to do: my calm self had already figured it out. I read the page, closed the app and got on with my day.
I didn’t become braver. I just stopped asking my frightened self to make big decisions. That, I think, is a lesson that reaches well beyond money.
We build your own plan, bias by bias, in the course Investor Psychology.
Educational content. Not financial advice.