Stock market panic: How to channel chaos into a rich future

After 44 years of living through stock market volatility, I know why the smartest investors never panic.

They see chaos as a chance to make their future brighter. They cheat financial market chaos.

Rather than allowing the fear of a moment to dictate direction, they stick to a well-thought-out plan to proceed up the path to success.

Panic is not a plan.

Stock market panic

Patience is.

I have owned stocks and lived through ten of the worst one-day stock market declines from 1981 to 2025.

I was there then and am here now, still owning stocks and not panicking or selling.

Stock market panic is not a plan

In fact, from 2000 to 2002, I lectured about wise investing at meetings around the country as the NASDAQ was on its way to losing 80% of its value from the March 2000 top to the October 2002 low. The Dow lost 50% of its value during the same time.

Indeed, since 1980, the S&P 500 has had an average intra-year drop of 14%. This includes all years, whether they end positively or negatively. I started my financial services business in 1981 and have witnessed this phenomenon for 44 years.

As we all know, the precipitants of this decline have been the Trump tariffs, the extent of which can’t be predicted.

We don’t know where, when, or how these phenomena will occur. We have no control over uncertainty, but we can have perfect control over how we respond.

Or, ideally, how we don’t respond.

The last thing in the world that long-term, goal-focused savers and builders of wealth do when the whole world is selling is – you know – sell.

A diversified stock portfolio is a plan

Don’t confuse headline risk with portfolio risk.

Remember that your stock portfolio is not an index that goes up or down daily. It is a portfolio of actual companies with real earnings.

Antidote for panic

So, coach, what if it declines tomorrow? It doesn’t matter what markets do tomorrow; what matters is what they ultimately do. What matters is that you own a highly diversified portfolio of well-managed companies that make and sell products that the world needs, demands, and pays for.

If you doubt this, read Robert Bryce’s book Smaller, Faster, Lighter, Denser, Cheaper.

The best investment advice you can ever follow has three qualities.

They are beautifully wrapped in this ancient verse.

Send out your bread upon the waters, for after many days you will get it back. Divide your merchandise among seven or eight investments, for you do not know what calamity may happen on earth. Ecclesiastes 11:12

“Send”, “waters,” and “divide” are clues for investment success.

1. “Send” every investment

The Hebrew word for “send” in this ancient verse literally means to “be dispatched.” Send off to a destination with purpose.

Whether it’s time or money, the best investments are not careless.

They are sent with purpose.

Sending out your bread successfully calls for . . .

  • intent
  • humility to let go
  • intuition about returns

In short, be smart with risk and then take it.

“Having deep conviction in what you own is the best bulwark against impatience upending investment returns.” Jake Rosser

Mix these skills with investment and success will return.

2. Patience in “waters”

A life of sending bread upon the waters is a life of patience.

I appreciate this image after driving boats in different waters.

The sea humbles anyone to learn the wind and the waters.

Things work out by not panicking.

Let the wind bring things around.

Long views are ignored in today’s media.

What sounds, feels, and looks good now is a priority.

Not the wise investor. “Many days” is a successful habit of waiting. Patience.

“Most people are too fretful, they worry too much. Success means being very patient, but aggressive when it’s time.” Charlie Munger

3. “Divide” adversity

Adversity and affliction are part of life.

Who knows when . . .

  • stock markets drop
  • a partner gets sick
  • a storm strikes
  • a test is positive

Make sure no one or two tragedies can clean you out.

“Seven or eight” is a Hebrew formula meaning “plenty and more than plenty.”

Seven means “plenty,” and eight means “go beyond that.”

In all my years of counseling folks on financial matters, I have observed the fruits of wise diversification.

Design different rabbit trails leading to the burrow.

  • Send out every investment with purpose.
  • Be patient with stormy waters.
  • Diversify paths toward your goals.
  • Remember the simple path to wealth.

What investment rule serves you well?

Stock market panic: How to channel chaos into a rich future

4 thoughts on “Stock market panic: How to channel chaos into a rich future

  1. Brad Loeffelholz says:

    Good stuff Steve. Always worth reinforcing the right approach to the markets.
    All the Best! – Brad

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