Uncertainty. We’ve heard that word a lot in the last few years. But we have also seen that resilience has been shown in almost all uncertain periods. Change is a constant part of our daily lives.

Some would argue that it is the only thing we can accurately predict. In my experience spanning more than three decades in wealth management, I’ve seen market volatility come and go – and that’s to be expected.

The cycles are familiar – the economy expands and contracts, and markets rise and fall, and often our emotions get caught up in the waves of change.

According to Schwab, market cycles vary in length. They have shared:

“A bull market is a long-term upward trend characterized by optimism and a robust economy. In contrast, a bear market is a prolonged downtrend, usually characterized by declines of 20% from recent highs, accompanied by widespread negative sentiment. The record run in US stocks, which began in early 2009 and ended in March 2020, is a recent example of a long-term market cycle.

Long-term cycles may also include several shorter cycles. For example, within a long-term cycle there may be short-term sell-offs that did not turn into bear markets or periods of largely sideways price movement. As illustrated in the chart below, investors can refer to a monthly chart of a benchmark such as the S&P 500® Index (SPX) for the past 20 years to identify past long-term market cycles.“

Over the years from cycle to cycle I have told clients, friends, peers and beyond – be focused, not emotional. Learning to master your emotions can allow you to become a better investor because instead of making reactive choices, you can make conscious choices.

Here are 10 steps to manage the emotional flare-up that can occur when change rears its ugly head. These steps can pave the way for sound investment decisions while helping you maintain your overall well-being.

1. Understand the need to evaluate your plan: Revisit your investment strategy based on your goals, risk tolerance and time horizon. Review the guidelines you have in place for how to respond to market fluctuations based on your individual scenario.
2. Be on a Need-to-Know basis: Stay up to date with market news, but don’t let it dominate your thoughts. Aim for a balanced view by consuming information from reputable sources without getting caught up in sensational headlines. Headlines sell, but they are often a lot of hype to get views and clicks.
3. Practice Mindfulness: Techniques such as deep breathing, meditation or yoga can help you stay grounded and manage stress. Mindfulness can help you observe your emotions without letting them dictate your actions.
4. Diversification: This can help reduce risk while opening doors of opportunity. Diversification can provide a cushion against market volatility that can result in a more stable overall return.
5. Focus on long-term goals: Keep your long-term goals in mind to avoid making impulsive decisions based on short-term market movements. Reactive decisions very rarely yield favorable results.
6. React with intention and not impulse: A knee-jerk reaction often doesn’t take the whole picture into account. Instead, assess the situation from a 360-degree perspective and consider whether action is needed based on your strategy.
7. Communicate with your advisor: Connect with your trusted advisor to get an objective perspective on your investments and ensure your strategy is still aligned with your goals.
8. Manage expectations: Understand that market volatility is normal and that investing involves risk. Set realistic expectations for returns and be prepared for ups and downs. It’s all part of the process.
9. Acknowledge your stress and relieve it: A healthy lifestyle supports emotional resilience. Taking the time to get in a good workout, making sure you get enough quality sleep and making nutritious food choices can energize you during times of increased stress. Recognizing that you are under stress if the first step in preparing to deal with it effectively.
10. Reflect on past experiences: Think about how you have reacted to past market volatility and whether those reactions were beneficial. Learn from past experiences to improve your response in the future.

We may not be able to control what happens to us in life, but we can always control how we react to things. The key is to react – not react. Reacting is an emotional response to a situation that is often impulsive and can be influenced by our past experiences or fears.

Responding is a thoughtful and conscious act that involves considering the situation, weighing the options, and making a conscious decision.

By integrating these practices, you can better manage your emotions and make more rational decisions during periods of market volatility.