When markets shudder: A common-sense guide for everyday investors

IF YOU opened an investment or brokerage statement – or even just glanced at a headline – in the past few weeks, you probably felt your stomach drop. Red arrows dominated the screen, and phrases like reciprocal tariffs, bear market, inflation and recession odds have crowded the news. It’s unnerving. For those at the cusp of retirement – or already living on the nest egg they spent decades building – it can feel existential.

The numbers look harsh on paper, but the psychological impact is even harsher. To the average person, a 15 per cent slide in the S&P 500 translates into postponed travel plans, a downsized gifting budget for grandchildren, or a longer time in the workforce than expected. The anxiety may cause some to panic and change course. Yet history, market mechanics and a few basic rules of thumb all suggest that the best response is usually the one that feels hardest in the moment: keep calm and act rationally.

Why downturns hurt so much

Human beings are wired to respond to threats with either fight or flight. We see a line going down and instinctively think, I have to act now before it is too late. Add social media feeds and 24-hour business news, and the noise becomes deafening.