🎧 Listen to this lesson

Prefer audio? Press play to hear this lesson narrated by George. You can read along, pause, and return whenever you like.

6..mp3

Markets will fall. Not maybe. Definitely, many times over your life. Drops of 10% happen often, drops of 20% or more happen every few years, and very large crashes a few times per generation. Historically, broad markets have recovered and gone on to new highs, but it can take years, and past recoveries don't guarantee future ones.

<aside> <img src="/icons/shield_orange.svg" alt="/icons/shield_orange.svg" width="40px" />

The damage almost never comes from the crash itself. It comes from selling in panic and not buying back.

</aside>

Why you'll want to sell

When your portfolio is red, your brain treats it like danger. The news is loud, social media is full of fear, and doing "something" feels safer than doing nothing. That's exactly why you write your rules now, while you're calm.

Your personal crash rulebook

<aside> <img src="/icons/document_orange.svg" alt="/icons/document_orange.svg" width="40px" />

Fill this in now. Read it the next time the market drops.

</aside>

If my portfolio falls 10%, I will:

• (example: do nothing and keep my monthly investment going)

If my portfolio falls 20%, I will:

• (example: keep investing, re-read this page, not open the app for a week)

If my portfolio falls 30% or more, I will:

• (example: keep investing, and if I have extra cash beyond my emergency fund, consider adding to my core ETF)

I will only sell an investment if:

• (example: I need the money for something planned, I'm rebalancing, or the thesis for a stock is broken)

Before any emotional decision, I will wait:

• (example: 72 hours)