Highlights:

• What investors get wrong during periods of volatility (and how to avoid it)
• Practical tips for keeping your cool and sticking to your plan
• Ways to safeguard your retirement

The S&P 500 has been on a rollercoaster lately.

Nothing is certain, but there’s a good chance the volatility could continue — and if you’re feeling a little uneasy about your investments, you’re not alone.

One thing everyone is asking is: “Is this time different??”

Well, yes and no.

Yes, in that we’ve never seen one single person throw the entire global economy into chaos in a matter of weeks.

No, because market turmoil has almost always been triggered by something “new”.

Whether it was COVID-19, the 2008 financial crisis, or the dot-com bubble, market shakeups are often caused by unexpected events.

Regardless of the cause, what matters most is what you do to build the stability, safety, and future you want.

Keep reading for ways to navigate S&P 500 volatility.

First, get some perspective

If you’ve been investing for a few years, chances are, you’re still ahead.

Instead of looking at just year-to-date returns, zoom out.

Check where your portfolio is over the past 12 months - or even since you started investing.

It's completely normal to have dips.

The article Understanding Stock Market Corrections And Crashes points out, “Since 1950, the S&P 500 index has declined by 20% or more on 13 different occasions.”

Most importantly, history shows markets typically recover - even if it takes time.

This is easy to see on the Passiv Reporting page.

Another trick: look at your average cost per share compared to today’s price.

For example, I recently checked where I’m at with VFV: my average cost was $104.99, and it was trading around $125.

Even with all the volatility, I’m still ahead!

Next, don’t get caught up in the narrative

The headlines are often scarier than the actual numbers.

It’s the stories surrounding the drop that can be more stressful than the drop itself.

The narrative doesn’t change the facts of the situation, but it does change how people respond to the facts.

It can also affect how you feel about it all.

Bridget Casey sums it up:

“It always feels like the end. The news will always insist 'this time is different.' It is probably not the end and it is probably not different.”

If you can tune out the noise and look at the hard data instead, it’ll be easier to stay calm and make smart decisions.

Practical steps you can take

Increase your savings rate

If future returns might be lower, your own contributions will matter more than ever.

A simple goal: boost your savings by 1–2% of your income each year if you can.

Diversify beyond the S&P 500

Putting all your eggs in one basket is risky.

Diversification — like holding a broad global index fund — gives you a natural buffer.

Robb Engen puts it perfectly:

“When those riskier assets drop like a stone, a globally diversified portfolio acts as a parachute to slow things down.”

Look for broad-market ETFs that spread your investments across countries and industries.

Adjust your risk tolerance

Market crashes are rare chances to really assess how much risk you can handle.

Ben Felix says:

“One of the often underappreciated elements of a risk profile is risk composure — how you have actually felt during past market crashes.”

If you’re losing sleep right now, it might be a sign your portfolio is too aggressive.

100% equities can feel GREAT when the market is green - but not so much when things take a downturn.

If you’re calm, you might even be able to take on more risk long-term.

Review and rebalance your portfolio

As the markets move, your portfolio can drift away from your ideal mix.

Especially if you’ve changed your risk tolerance, you might need to rebalance to bring everything back in line with your risk tolerance and goals.

If you use Passiv, rebalancing can be as easy as clicking a button.

Adjust your expected rate of return

Over the long run things will likely work out, but to be safe it’s smart to run the numbers for retirement using a lower rate of return.

If you usually assume 7–8% annual returns, run projections based on 5–6% returns instead.

If that adjustment throws your plan off track, you might need to save a little more, spend a little less, or work a bit longer.

Don’t be tempted by big returns

When the market is so, it’s especially tempting to chase high returns.

However, data shows that you’re better off avoiding speculative bets like junk bonds, crypto, or “hot sectors.”

Focus on quality investments and smart risk management first.

Boost your emergency fund

Having extra cash gives you flexibility and peace of mind during downturns.

Check out our complete guide to emergency fund strategies here!

Keep costs as low as possible

Higher fees drag down returns even more when markets are volatile.

This is because every dollar lost to fees is a dollar you can't recover when the market rebounds.

In choppy markets, protecting your gains - and minimizing unnecessary costs - becomes even more important for long-term growth.

Stick to low-cost ETFs and index funds. Moving from a 1% fee to a 0.1% fee could save you thousands over the long term.

Dollar-cost average consistently

No matter what the market is doing, keep investing on a regular schedule.

This is called dollar-cost averaging, and it smooths out the risk of bad timing.

This can look like investing every two weeks (so it coincides with payday) or once a month.

Passiv makes dollar-cost averaging easy by automatically showing you exactly what to buy to stay on track. With one click, you can invest consistently without the hassle of manual calculations or market timing.

Click here to get the Forever Free version of Passiv!

The bottom line

You can't control the market.

You can't control the economy.

But you can control your savings rate, diversification, risk tolerance, and long-term habits.

Robb Engen recommends this mantra to get us through:

“I am an emotionless robot when it comes to investing.

I have a well diversified investment plan.

I will not change that plan based on current market conditions.

I will keep investing regularly according to my plan.”

If you’ve followed the points we covered here, you’ve done everything you can to prepare your investments for the long-term.