Stock Market on Your Mind?

While the stock market recently notched all-time highs, let’s agree that it is also, shall we say, “volatile.”

Since the beginning of 2026, the Standard and Poor’s 500 Index opened at 6,878.11 on Jan. 2, slid to a closing low (for the year to date) of 6,343.72 on March 30, then reached an all-time high of 7,501.24 on May 14, falling back to 7,445.72 by May 21 — and through all of this commotion, the S&P 500 rose 8.3% year to date.

There is no better way to gauge the effect of up and down movements than to review what happens if you miss “best days” during a period of time. As the J.P. Morgan 2026 Guide to Retirement points out, six of the best 10 days in the stock market between Jan. 2, 2006, and Dec. 31, 2025, occurred within two weeks of the 10 worst days. Notably, if you missed the 20 best days during that time period, your return would be 3.8% instead of 11%. That illustrates the effect of intra-year volatility — a phenomenon that is very much a part of stock market history.

The question is, does market movement affect your investment decisions? Could you potentially be acting based on a bias – a “tendency to favor or oppose something based only on a partial assessment of its merits,” quoting the Citi Wealth article “Is Bias Impacting Your Investment Decisions.”

What biases might come into play should the market take a sharp downturn, something we haven’t experienced since the Coronavirus decline in 2020, when we saw a very rapid decline of 34% in the S&P 500 Index over a period of five weeks. At the time, the global financial services company Morningstar offered “a behavioral checklist for investors facing turbulent markets,” featuring six key points that are worth reviewing now, just in case:

–Get to know your biases

“Research shows that understanding our biases can help us spot them in our decisions,” the report says. That’s a point well made, but it does take some homework.

“When volatility hits, you may want to create a modified schedule [of when you listen to the news], but still keep it calm and moderate — maybe make a rule that you can only catch up on the news once at the end of the day, or even once a week.”

I’ll go further: Use the news to enhance your knowledge, but not to trigger an action.

–Create speed bumps for decisions

“Sometimes, the only thing we need to make a good decision is time. But it can be tough to slow down when our emotions are running awry.”

Agreed. Emotions should not rule.

–Reconnect with your goals

“If you start feeling anxious about your finances, take a break from day-to-day market performance and check in on your financial goals.”

Take retirees. Is the goal to protect assets while generating income and providing capital appreciation potential? That’s workable, but it calls for proper management, respecting volatility and avoiding having to sell positions during a market decline to free up money to live on.

–Be your own devil’s advocate

This point is also helpful in slowing down an emotional reaction. Argue both sides of a buy/sell decision. Ask yourself why you want to sell (the market is going to zero) and why you might want to buy that same investment (fundamentals are strong and the price is right).

“It’s extremely hard to stay calm and wait out the storm when your portfolio’s losing value — we all have a tendency toward action. Don’t suppress this urge; redirect your efforts.”

Also make sure you understand your tolerance for risk, described by Investor.gov as a person’s “ability and willingness to lose some or all of an investment in exchange for greater potential returns.”

To gauge your tolerance, try the University of Missouri’s Investment Risk Tolerance Assessment, which uses more than 20 questions to determine your inclination toward risk.

The better you know yourself, and what affects the decisions you make, the more secure you can be when it comes time to take action.

For links to all resources referenced in this column, go to juliejason.com/column-resources.

Seasoned investment counsel and award-winning columnist and author, Julie Jason, JD, LLM, promotes financial literacy and investor protection. Read her latest book, “The Discerning Investor: Personal Portfolio Management in Retirement for Lawyers (and Their Clients),” published by the American Bar Association. Write to Julie at readers@juliejason.com. While all questions cannot be answered, each email is read and reviewed and can lead to discussion in a future column.