A scary market event hits.
Someone you trust tells you to sell everything.
What should you do next?
Everyone has one. A friend, relative, business partner, or “smartest person I know” who shows up during a scary market event and says: “This is bad. It’s going to get worse. You should sell everything and go to cash.”
They usually mean well. The problem is they rarely know your full financial picture, your goals, your tax situation, your time horizon, or why your portfolio was built the way it was in the first place. They are reacting to headlines. Your plan was built around your life.
That’s a big difference.
I’ve seen this happen during wars, bank failures, recession scares, and plenty of other moments that felt like the beginning of the end. In those moments, abandoning a thoughtful plan can feel smart. It can feel prudent. It can feel like you’re doing something.
But often it’s just fear with better marketing.
A good financial plan is supposed to account for uncertainty. That’s the point of proper diversification, cash reserves, risk alignment, and long-term thinking.
So here’s a simple rule:
If someone tells you to make a major change to your portfolio during a scary moment, pause before you act.
- Review the plan.
- Get context.
- Talk to the person who actually knows your situation.
A lot of investing damage does not come from bad headlines. It comes from bad reactions.
Perspective is underrated. Process is boring. Patience is hard.
Fortunately, those three things still work.
Trying to jump in and out during stressful periods is a dangerous game, because the recoveries can be fast and unpredictable. Even positive years in markets have had down days, weeks, and months.
