Surviving Stock Market Hysteria: Strategies Revealed

By Kelley Muhsemann
Marketing Manager 

In the last 100 years, over $25 trillion has been lost to greed and fear. These primal emotions, deeply ingrained in human nature, wield an unparalleled influence on our decisions, particularly when it comes to investing.

Let’s journey through pivotal moments in history where mass hysteria gripped the markets, revealing the cyclical dance of greed and fear.

Beyond mere observation, answer the following questions so you can recognize your susceptibility to giving in to greed and fear:

Scenario #1: There is $100 on the table. Would you rather:

  1. Receive $50 Instantly
  2. Flip a coin. Heads = you receive $100; Tails = you get nothing.

Scenario #2: There is $100 on the table. Would you rather:

  1. Instantly lose $50
  2. Flip a coin. Heads = You lose $100; Tails = You keep $100.

In scenario one, most folks will select to receive the $50 because it’s a sure thing. But in scenario two, most will choose to flip the coin, going with the unknown option and taking a risk. In both questions, the choice is based on fear – the fear of losses.

So, what has history taught us, and what actionable strategies can we adopt to shield ourselves from succumbing to the fear of losses?

Whether you’ve experienced a historical market boom or bust, the reality is that emotions and money do not mix. Consider nurturing better financial habits and instincts by following the guidelines below, so you can avoid the pitfalls of greed and fear in investing.

  • Set long-term financial goals. Understand that investing is a long-term game. Historically, markets tend to recover from downturns over time. Focus on your long-term financial goals rather than short-term fluctuations.
  • Avoid checking your portfolio daily. Constantly monitoring your portfolio can lead to unnecessary stress, overconfidence, impulsive decisions, and may tempt you to make unnecessary actions. Accept that some factors affecting the market are beyond your control.
  • Focus on what you can control. Focus your time and energy on your investment strategy, diversification, and how you react (or don’t react) to market movements.
  • Consult with a fee-only financial advisor. A fee-only financial advisor can provide personalized guidance based on your financial situation, risk tolerance, and investment goals, with the added benefit of working in your best interest as a fiduciary.
  • Have a financial plan in place. It’s not enough to develop a well-thought-out investment plan with clear objectives and risk tolerance levels; you need a plan in place that you can follow even when the market shifts. Having a solid roadmap can provide a sense of control and direction, helping to reduce anxiety during turbulent times.
  • Think and research before acting. Understanding every option before making a financial decision is crucial for alleviating fear. Thinking and researching first can allow you to explore alternatives, avoid impulsive decisions, minimize regret, maintain discipline, and ultimately increase your confidence in your decisions.

If you would like to speak with our team of CERTIFIED FINANCAL PLANNERTM (CFP®) professionals, we would be happy to show you how our financial planning process can help you Plan, Achieve, and Live® the life you desire. Please contact us for a complimentary discovery call at 631.218.0077 or at

R.W. Rogé & Company, Inc. is an independent, fee-only financial planning and investment management firm serving clients locally and virtually across the country, with Long Island, New York, Beverly, Massachusetts, and Naples, Florida office locations. R.W. Rogé & Company, Inc. was founded on a “client first” culture and proudly commits to acting in your best interest as a fiduciary. We help clients Plan, Achieve, and Live® the life they want since 1986. To learn more about how we do this, click here.


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