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Volatility Is Normal
Markets go up and down. They always have and always will. Since 1970, the Canadian stock market has experienced an average intra-year decline of about 14%—yet has finished positive in most of those years.
Understanding that volatility is a feature, not a bug, of investing helps you weather the storms.
Why We Panic
Loss Aversion
Psychologically, losses hurt about twice as much as equivalent gains feel good. A $10,000 loss feels worse than a $10,000 gain feels good.
Recency Bias
We weight recent events too heavily. A week of declines feels like it will continue forever, even though history shows otherwise.
Media Amplification
Financial news thrives on fear. "Markets tumble" gets more clicks than "Markets experience normal fluctuation."
Strategies for Staying Calm
Remember Your Time Horizon
Even at 65, you may have 25-30 years of investing ahead. Short-term volatility matters little over decades.
Keep Perspective
- Look at 10-year charts, not 10-day charts
- Remember past crises (2008, 2020) and how markets recovered
- Your portfolio is still there—paper losses aren't realized losses
Limit Information Intake
- Check your portfolio monthly, not daily
- Turn off market news during volatile periods
- Unfollow financial doomsayers on social media
💡 Note: Create a "volatility plan" when markets are calm. Write down what you will and won't do during a downturn. Refer to it when emotions run high.
What Not to Do
⚠️ Important: Selling during a market crash is almost always the wrong decision. You lock in losses and miss the recovery. Time in the market beats timing the market.
- Don't sell in panic
- Don't check your portfolio constantly
- Don't listen to predictions of doom
- Don't abandon your investment plan
Constructive Actions During Volatility
- Rebalance if allocations have drifted significantly
- Tax-loss harvest if appropriate in non-registered accounts
- Continue regular contributions (you're buying at lower prices)
- Review your risk tolerance—is your portfolio right for you?
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About Maple Wealth Guide
Maple Wealth Guide is an independent Canadian financial education website. Our team of educational writers researches and explains investment concepts, retirement-related topics, and personal finance information for Canadians aged 50 and over. We are not licensed financial advisors and do not provide personalized recommendations. All content is for educational purposes only.