What To Do When Stock Market Is CRASHING (And You Feel PANIC)

If you've opened your investment account lately and felt your stomach drop… you're not alone. Watching your portfolio shrink—especially by 20% or more—can feel terrifying. Whether you’re a new investor or someone nearing retirement, a stock market crash can trigger real fear. So what should you actually do when the market takes a nosedive?

Here are some key principles to help you navigate turbulent times with a level head and a long-term mindset.

1. Feeling Panic Is Normal — But Don’t Let It Drive Your Decisions

Let’s be honest: telling yourself “don’t panic” when your hard-earned savings are shrinking is easier said than done. Panic is a natural human response. But reacting emotionally can lead to impulsive decisions that might harm your financial future more than the crash itself.

2. Your Time Horizon Matters

If you're 10, 20, or even 30 years away from retirement, this downturn could actually benefit you. Why? Because you’re buying shares at a discount—like a sale on future wealth. With time on your side, your investments have the opportunity to recover and grow.

3. Avoid Panic Selling

Selling your investments in a downturn means locking in losses. If you’ve done solid financial planning, this market dip shouldn’t force you to sell assets just to make ends meet. Hang tight and trust the plan.

4. Stick With Dollar-Cost Averaging

Continue investing regularly through the highs and lows, as long as your overall investment strategy still makes sense. Dollar-cost averaging smooths out your buying prices over time and removes the pressure of trying to time the market.

5. Reevaluate — But Don’t Overreact

Have recent events (like new tariffs, economic shifts, or global conflicts) changed the fundamentals of your investments? If so, it might be time to revisit your investment thesis. Be thoughtful—not reactive.

6. Don’t Try to Time the Bottom

We all wish we could predict the lowest point in the market. But trying to “catch a falling knife” can be dangerous. If you have extra cash, consider investing it slowly and carefully—nobody knows where the true bottom is.

7. Build a Bigger Emergency Fund (Especially If You're Older)

The standard 3–6 months of expenses might not be enough if you're close to retirement. Consider increasing your emergency cushion to 6–12 months—or even more—to avoid withdrawing from your investments during a downturn.

8. Market Crashes Happen — And Recovery Takes Time

This isn’t the first time markets have fallen. Remember the 2008 financial crisis? The dot-com bubble? Black Monday in 1987? History shows us that the market does recover. On average, the stock market has returned about 10% per year—though not every year is a winner.

9. Plan for Real Returns — After Inflation

Even though the market might average 10% annually, inflation eats into those gains. To be more realistic, plan for a 7% return when using retirement or compound interest calculators. It’s a simple way to keep expectations grounded.

10. Stop Refreshing Your Portfolio Every Day

Seriously—stop torturing yourself. Checking your portfolio constantly during a downturn only fuels anxiety. If your plan is solid, the best thing you can do is keep calm and carry on.

Final Thoughts

Crashes, corrections, and bear markets are part of the investing journey. While this may be your first big market drop, it likely won’t be the last. The most important thing is to stay grounded, avoid knee-jerk reactions, and keep your long-term goals in mind.

We're in this together. Hang in there — and keep investing wisely.

—Dr Joanne Narae