5 Mistakes to Avoid During a Market Selloff
Because panic has never built wealth.
When the stock market drops, your instincts might scream at you to do something—anything.
But if your goal is long-term wealth, your job during a market selloff isn’t to react.
It’s to stay calm, stay disciplined, and avoid the mistakes that most investors make when emotions take over.
Here are five of the biggest mistakes to avoid—and what to do instead.
1. Panic Selling
This is the most common—and most costly—mistake.
When the market drops 10%, then 20%, your brain starts doing the math:
“How much have I lost?”
“Should I sell before it gets worse?”
But here’s the truth: You haven’t lost anything unless you sell.
And historically, markets always recover.
📉 If you sold during the COVID crash in March 2020, you likely missed the fastest bull run in history that followed.
What to do instead: Zoom out. Stick to your strategy. Remember: volatility is the price of admission for long-term gains.
2. Stopping Your Investments
It feels logical: “The market’s going down, so I should wait until it settles before investing more.”
But that’s the exact opposite of what long-term investors do.
They keep investing especially when prices drop—because they’re getting more shares for the same money.
📈 Buying during a downturn is like shopping with a permanent discount.
What to do instead: Keep contributing to your 401(k), Roth IRA, or brokerage. Automate it if you haven’t already.
3. Watching the News All Day
Every red arrow flashes like a warning sign.
Headlines go from “concern” to “crisis.”
And suddenly you're in full-blown panic mode.
But the media isn’t designed to help you build wealth.
It’s designed to get clicks.
What to do instead: Check your portfolio less often. Limit your exposure to sensationalist headlines. Focus on decades, not days.
4. Trying to Time the Bottom
Here’s a tempting idea:
“What if I just wait for the bottom… then I’ll invest everything.”
But here’s the catch—no one knows when the bottom is.
Not you. Not the experts. Not even the AI.
📉 Most of the market’s best days happen right after its worst ones. Miss them, and your returns suffer.
What to do instead: Stick with dollar-cost averaging. It’s boring. It’s automatic. And it works.
5. Changing a Sound Strategy Mid-Storm
When things feel uncertain, you might be tempted to switch it up:
- Move to cash “just for now”
- Jump into gold or crypto
- Abandon index funds for flashy individual stocks
But smart investors don’t jump ship in the middle of the storm—they adjust the sails and stay the course.
What to do instead: Revisit your original plan. If it made sense before the drop, it still does now.
Market selloffs are uncomfortable—but they’re also normal.
If you want long-term results, you need long-term behavior.
The market rewards consistency, not perfection.
The investors who win aren’t the ones who react the fastest.
They’re the ones who stay in the game longest.
So don’t try to outsmart the storm.
Just refuse to abandon the ship.
