What should my mantra be when the market has a big drop?

Brain science explains that people often react to financial fear as if it were physical fear, the fear of mortal harm. If you see a snake, you might fear harm (even if most snakes are not dangerous). Cars, however, statistically, harm many more people than do snakes, yet few people are afraid of cars. Cars, if used wisely, are very helpful vehicles to get from point A to point B faster and safer. Investing is similar. Investing wisely, like a car, can hit bumps in the road or have a flat tire that gets repaired, metaphorically speaking. However, that doesn’t mean you abandon your car. Effective drivers remain patient, maintain their car and arrive to their destination, just like smart investors. So, the next time the market drops and you feel nervous, say to yourself… “it’s a car, not a snake, it’s a car, not a snake” as you breathe deeply and take a walk around the block, to allow your brain’s “fight or flight” response to calm down, so that your brain has opportunity to shift activity back to the “frontal lobe” or “prefrontal cortex”, the part of the brain that is responsible for rational, long-term decisions. Also, when you continue to add money to your retirement account, especially in market downturns, you are buying at lower prices, which magnifies your account balance during the recovery and increases your wealth and retirement readiness. To learn more about the “car vs. snake”, and the benefits of consistent saving, view WealthStep’s Financial Independence video.