When the Market Panics, You Should Celebrate

When markets fall, emotions rise. Investors often panic, pulling their money out of fear rather than strategy. But at Personal Finance Reimagined (PFR), we teach the opposite. Down markets are not signals to run—they are flashing opportunities to buy in. Using the Investment Barbell Strategy (IBS), we help clients and students reframe volatility not as danger, but as potential energy.

About the Author:  Jeff Hulett leads Personal Finance Reimagined, a decision-making and financial education platform. He teaches personal finance at James Madison University and provides personal finance seminars. Check out his book -- Making Choices, Making Money: Your Guide to Making Confident Financial Decisions.

Jeff is a career banker, data scientist, behavioral economist, and choice architect. Jeff has held banking and consulting leadership roles at Wells Fargo, Citibank, KPMG, and IBM.

The Knife-Catching Fallacy

I often relate to clients and students, “Trying to time the market is like catching a falling knife: nearly impossible and likely to end in pain.”  It may feel safer to wait for stability, but that is a behavioral trap. The market rarely announces its bottom in real time. By the time it feels safe again, the rebound is already underway—and opportunities are gone.

A deeper fallacy is imagining the market as a single, all-knowing force. In reality, it’s a collection of people—just like you—navigating the invisible hand of uncertainty, driven by fear and greed. All investors have unique motivations and constraints.

The opportunity is this: step out of that emotional cycle. The Investment Barbell Strategy (IBS) offers you a structure to act with confidence, not react with panic. It’s not about timing—it’s about strategic positioning.

Be a Contrarian Investor

When everyone is running, the best investors walk calmly toward opportunity. That’s contrarian thinking. When markets dip, especially across broad, diversified portfolios like those in Quadrant 2 of the IBS ("Robo"), we see a buying opportunity. Why? Because the long-term fundamentals of well-diversified, low-cost equity portfolios remain strong. The only thing that’s changed is the price—and lower prices mean greater value.

The Car Analogy That Changes Minds

Here’s what I share with skeptical investors:

"If you were eyeing a new car and it suddenly went on sale for 25% off, wouldn’t you be thrilled? You’d likely rush in to buy before the deal disappears. So why is it that when the stock market goes on sale, we do the opposite?"

This simple metaphor flips the script. When we buy cars, houses, or clothes, we celebrate discounts. Investing should be no different. Down markets are your 25% off sale on future financial freedom.

The Power of Quadrant 2: Robo Portfolios

In the IBS framework, Quadrant 2 represents long-term, highly diversified, high-volatility portfolios. These are typically robo-advised portfolios using ETFs that span the global market. When markets fall, these portfolios drop too—but the diversification protects against ruin, and the volatility creates rebalancing opportunities.

It is this exact quadrant where buying into dips pays dividends. Automatic contributions during downturns result in dollar-cost averaging: buying more shares at lower prices. When the market rebounds, you own more at a lower cost basis—maximizing gains.

Think Spring, Not Spiral

Think of the economy like a spring. In downturns, the spring compresses and energy builds. Prices fall. Fear rises. But this is not the end—it’s the compression phase. When recovery begins, that trapped energy is released with force. Historically, markets surge when they bounce back. Those who invested during the downturn are lifted with the spring’s force.

Missing this compression phase means missing the slingshot of growth.

Use Commitment Devices

We teach clients to automate investments. By setting up recurring transfers into robo portfolios, you bypass fear-based decisions. This "set it and forget it" model acts as a commitment device—protecting you from yourself.

This is particularly important during turbulent times. Your system takes over when your emotions want to intervene. It is decision architecture at its best.

Final Thoughts: Zoom Out, Buy In

If you zoom in, all you see is chaos. Red charts. Bad headlines. Volatility. But when you zoom out, history tells a different story. Markets trend up over decades, not days. The winners are not the ones who predict the bottom; they are the ones who stay the course.

So when markets drop, take a deep breath. Reframe the fear. Channel your inner contrarian. And remember: that falling price tag might just be your best chance to buy the future on sale.

You’ve got this. And you’re not alone.

For more on PFR and the Investment Barbell Strategy, visit FinanceRevamp.com or read Making Choices, Making Money.