Book Now Available

Get Your Financial Fix! Subscribe For Our Latest Planning Tips.

The Enlightened Investor: Top 3 Do’s and Don’ts of Down Market Investing

Humans aren’t always rational beings. If we were, we wouldn’t eat food that makes us sick, procrastinate on key tasks, and try to impress people we don’t like. So what causes these hiccups in rationality' Simply put, it’s our emotions

When we rely on our emotions alone to guide our behavior, we’re destined for trouble. This is especially true when it comes to our finances. All too often when the market is volatile so are our feelings about it. A scarcity mindset quickly sets in, and derails our decision making. 

But it doesn’t have to.

So what do we do when the market is down' That’s what we’re here to find out. Together we’ll review the do’s and don’ts of investing in down market circumstances. That way, you’ll be able to recognize your emotions, process them, and come out making level-headed decisions amidst the uncertainty. 

Do # 1: See Long-Term Opportunity

“Be fearful when others are greedy and greedy when others are fearful.” – Warren Buffet1

When a market is down, most people see scarcity. They see the need to cash out before things get worse. They see investing as something to put on pause until the financial smoke clears. But savvy buyers see the opposite. 

Contrarian investors like Buffet see opportunity in the chaos. They see undervalued businesses with attractive new price tags. They see positions to take now that could pay hugely later on. They see the need for a long-term plan, and the need to stick to it. 

When you approach investing with a long-term mindset, your eyes will be open to new opportunities. You’ll see that sometimes the best time to get in the market is when everyone else is leaving it. That’s because it allows your portfolio to expand in rock-solid, long-term positions at a much lower cost.

Don’t allow feelings of panic, sensationalized news, or other triggers to blind you to great opportunities. Create a plan you believe in, stick to it, and take advantage of investing in down market prices to grow in the long-term.

Do # 2: Study History and Get Perspective

No one knows the future, but the best predictors are studiers of the past. And if you want to see long-term opportunities during the downtimes, you’ll need more than wishful thinking. You’ll need to root your faith in historic performances. 

A great place to start is by reviewing the biggest market crashes in history. When you do this, common patterns become apparent. You’ll notice things have been bad before, like really bad. But you’ll also see the market has always recovered, stabilized, and hit new all-time highs.

Another exercise worth your time is to see present market problems as objectively as possible. Too often our emotions are swayed by skewed, misleading, or outright incorrect information. But thankfully, there are a variety of ways to combat this. 

Ways to improve objectivity include, but are not limited to getting information from multiple sources, consuming more long-form content, and increasing your awareness of triggers. By doing this, you can avoid the trap of thinking how you feel is how things really are.  

Do #3: Acknowledge Your Emotions

While emotions can cause impulsive, irrational decisions, they also give life its vitality. Without them we’d feel no pride in our work, excitement in our opportunities, or joy in our accomplishments. We’re not trying to repress our emotions, we’re just keeping them in check. 

By acknowledging how we truly feel, we can do just that. For example, I know if I don’t eat properly, get enough rest, or take my anxiety medication, I’m prone to mood swings. If I don’t feel my best, making mentally healthy financial decisions becomes a lot harder. Therefore, I know I need to prioritize my diet and sleep.

For you, it may be something different. Perhaps watching the news makes you anxious, which in turn makes you want to act impulsively. You may then need to reevaluate your relationship with negative media. Maybe you’re prone to gambling addiction. If that’s the case, you may need to watch yourself around hot stock tips, or highly-speculative opportunities. 

We’re weak when it comes to resisting our emotions. If our environment is one of constant temptation, we’ll eventually succumb to it. But by acknowledging our emotional weaknesses we can become stronger. So be honest about how you feel, and what makes you feel that way. Then design a system that works in alignment with your triggers. 

Don’t #1: Try to Time the Market. 

Let’s make something clear, no one knows for sure what the market is going to do. Whether you’re an investment banker, hedge fund manager, financial analyst, or YouTube guru is irrelevant. But that doesn’t mean the market is entirely random. 

We can use past performance and thorough analysis to predict the trajectory of market trends. Still these are only predictions, and they’re going to have faults. One of the biggest can be when something will occur. 

It’s impossible to know how long a market will trend downward, take to recover, or reach a new high. For this reason, it’s imperative to not fall into the trap of thinking you’re able to time the market. Buy today, and you could end up catching a falling knife. Buy later, and you could miss out on a rally.

So forget about timing! Instead trust in the aggregate, long-term data. What we know for sure is that there’s been a full recovery from every down market in U.S. history. Yes, it’s always possible there won’t be another. But history tells us that’s our fear-based emotions talking. So take some deep breaths, keep investing, and hold/ buy those long-term value positions.

Don’t #2: Panic Sell

Panic selling falls under the umbrella of timing the market. But it plays a particularly damaging role in down markets. For this reason, it’s worth giving it extra due diligence when making investment decisions. 

When the market starts dropping, the most common emotion-based reaction is to start selling your investments. You worry further drops are coming, and it could be years before a recovery happens- if it happens

The problem with this (other than trying to time the market) is that it locks in losses. In a down market your portfolio’s losses start off as unrealized. That means your wealth is only down on paper. But if you panic sell, these losses become realized. You lose out on the potential for those positions to make a recovery, and you have less capital to be reinvested later on.

NOTE: In some cases, it can make sense to liquidate some of your positions in a down market. If for example you’re nearing, or are in retirement, your recovery time frame is shorter. However, even then, it’s critical you evaluate your needs and the true state of the market. 

Don’t #3: Do Everything Yourself

Changing your investment mindsets, managing your emotions, and analyzing the market objectively is incredibly challenging. And if you attempt to do it alone, it becomes borderline impossible. That’s because the quality of our lives, financial and otherwise, is determined by the quality of our relationships.

We do our best work as a team. And that’s because we are able to rely on the viewpoints, knowledge, and experience of others. So when it comes to your investments, a key consideration needs to be made for expanding your personal network of help. 

At Crafted Finance, our team of professionals is here to help you weather financial storms. We’re long tested in keeping our clients tracking through down markets. And if you’re ready to start talking to a professional, so are we. Schedule a complimentary consultation today, or call us directly at (650) 336-0598 with any questions.

Free eBook

Property Done Properly

Learn how real estate fits into your overall wealth plan.

Investment Advisory Services are offered through Crafted Finance, LLC, a registered investment adviser. Please remember that securities cannot be purchased, sold or traded via e-mail or voice message system. This advertisement and any documents, files or previous advertisements may contain information that is confidential or legally privileged.  If you are not the intended recipient, you are hereby notified that you must not read this transmission and that any disclosure, copying, printing, distribution, or any action or omission of this transmission is strictly prohibited.  If you have received this advertisement in error, please immediately notify the sender by telephone at (650) 336-0598 or return and delete the original advertisements and its attachments without reading or saving in any manner.

Share This Blog Post:

Kristin Harad

Marketing Coach

Step right up and meet Kristin Harad, the Marketing Coach wizard! Guiding businesses through the intricate maze of marketing, Kristin combines her smarts, pizzazz, and a hefty portfolio of wins to show she’s the real deal. Ever wonder what makes a brand pop and a strategy rock? Kristin’s your answer, lighting up the marketing world and turning potential into prowess.

Boasting three decades in the marketing arena, Kristin’s more than just a seasoned pro – she’s a beacon. Whether she’s spotting the next big trend or identifying a golden opportunity, she’s always got her finger on the pulse. And the cherry on top? Her rock-solid commitment to catapulting her clients right to the top of the business game. Dive into the marketing world with Kristin, and watch magic happen!

Jon Fogg

Content Creator

Jon Fogg is a dynamic and innovative content creator who has been making waves in the digital realm. With a passion for creativity and a flair for storytelling, Jon has captivated the financial world through his engaging and diverse content.

When he’s is not working on an SEO blog or case study, you’ll find him enjoying local art galleries or a phenomenal read. Friends and colleagues often commend him for his clear enthusiasm and dedication, which is evident in every project he undertakes. 

Kingston Hollman MBA


Meet Kingston Hollman, the compliance guru everyone’s been talking about. With a sharp mind for regulatory ins and outs, Kingston is all about keeping businesses on the straight and narrow. That’s why he’s a go-to in the compliance world!

Sporting an MBA under his belt, Kingston’s not just about book smarts. He knows the fine dance between business strategy and staying in line with the rules. And guess what? He’s mastered it. Ensuring companies sail smoothly through the often-stormy waters of compliance is his game.

From the get-go, Kingston’s been crafting top-tier compliance programs, tailored just right for all sorts of industries. It’s his eye for detail and that knack for spotting the little things that make him stand out. He doesn’t just set up a system; he fosters a whole vibe of staying compliant, making sure everyone’s on board.

Jessica Martineau

Client Operations Manager

Jessica is a seasoned professional with a diverse background, bringing a decade of expertise across multiple industries. A proud graduate of SPU, her journey in the professional world is marked by significant accomplishments.

With nearly eight years dedicated to managing projects in the graphics and built environment sectors, Jessica has honed her skills as a meticulous Project Manager. This tenure has instilled in her a knack for thriving within organized structures while fostering robust client relationships, a hallmark of her professional ethos.

Her experience in the Finance industry spans almost a decade, where she has held pivotal roles as Lead Client Operations Manager and Director of Operations. Notably, her FINRA SIE Certification stands as a testament to her commitment to excellence.

Jessica’s strengths lie in cultivating enduring client connections, fueled by her passion for delivering thorough solutions. She finds joy in understanding and engaging with her colleagues, nurturing a cohesive work culture.

As a Pacific Northwest native, Jessica enjoys hiking, camping, and skiing. She loves reading, attending live music, plays, and comedy shows. Always a foodie, she delights in discovering new restaurants and revisiting old favorites, especially if there is a water view.

Most importantly, Jessica’s world revolves around her family—her amazing husband, Lee, and their two great kids. They are her inspiration and the anchor to her life outside of work.

Dionne Kelly

Executive Assistant

Let’s dive into the world of Dionne Kelly! Born in St. Kitts and with her roots deep in Barbados, Dionne’s been globe-trotting from her island homes to Canada, the USA, and Belize. Got a love for tropical spots? So does Dionne. Her passport’s got stamps that tell tales of sun, sea, and a bunch of awesome adventures.

Now, when it comes to her profession, Dionne’s the real deal. Over 20 years in the game as an Executive Assistant, she’s been the secret ingredient for bigwig C-suite execs. Think of a challenge, and Dionne’s likely tackled it head-on with her unbeatable organizational skills and eagle eye for detail. 

Oh, and did we mention she’s a foodie? Dionne’s taste buds have danced across diverse culinary landscapes, adding a sprinkle of global flavor to her persona. In the world of executive support, she’s a powerhouse, always two steps ahead and ready to make things happen. 

Joe Wride CFP®

Founder & CEO

Meet Joe Wride, the president and founder of Crafted Finance. With a knack for pension and investment management, insurance, and financial planning, Joe’s all about offering top-notch services without breaking the bank. That’s why he started Crafted Finance!

A proud Finance major from Washington State University, Joe’s got the credentials to back it up as a Chartered Life Underwriter and CERTIFIED FINANCIAL PLANNER™ Professional. Since 2009, he’s been helping individuals, families, and pension plans make sense of their finances. Joe’s even on the board of the Financial Planning Association’s Puget Sound chapter. Check out his LinkedIn profile here.

Joe gets that everyone’s got their own money story. That’s why he’s crafted a unique process to help folks of all stripes manage their finances, whether they’re flying solo, raising a family, or running a company. He’s all about learning and growing to make sure his guidance is just the right fit for his clients.

When he’s not crunching numbers, you’ll find Joe enjoying the Seattle life. He’s into skateboarding at Alki beach, biking, golfing, snowboarding, hiking, and camping. Sports fan? You bet! Joe’s a die-hard supporter of the Cougars, Mariners, Seahawks, and Sonics. But what really matters to him is family time with his wife Jessica, daughter Ocean, and dog Kanga. Joe’s excited to welcome more kiddos into their home through foster care and adoption in the future.

Download for Free

Property Is Power.

Let us know which email address to send this Free eBook to down below:

Please enable JavaScript in your browser to complete this form.
This best describes my experiance in real estate investing:

Get Your Financial Fix!

Subscribe So You Don’t Miss Our Latest Planning Tips.

Search Site