What a bad month teaches you

On March 12, 2020, I watched the S&P 500 drop 9.5% in a single day. The NYSE triggered its circuit breaker for the first time since 1997, halting all trading for 15 minutes because the decline was happening too fast. Canadian banks, the stocks everyone calls “safe,” fell 15% in a day. Airlines dropped 40%.

I had friends texting me nonstop. “Should I sell?” “I can’t watch this anymore.” “I’ll get back in when things settle down.”

A few of them did sell. Every single one of them regretted it.

What it actually looked like

The charts you see in articles written years later show a sharp V. Down fast, up fast. It looks clean. Almost manageable. But living through it was nothing like that.

In real portfolios, March 2020 didn’t feel like a V. It felt like a free fall with no floor. Every morning brought new headlines. Borders closing. Businesses shutting down. Oil prices going negative, which nobody even knew was possible. The market would drop 5%, rally 3% the next day, then drop 7% the day after that. It was chaotic, and the chaos made it impossible to think clearly.

I remember looking at my portfolio and doing the math on what the decline meant in dollar terms. That was a mistake. Percentages are abstract. Dollar amounts are personal. Seeing the actual number I’d “lost” hit differently than seeing a red percentage. It felt like someone had reached into my account and taken money out.

I didn’t sell. But I want to be honest: I thought about it. Not because I believed it was the right move, but because the discomfort was overwhelming. The urge to do something, anything, was physical. That’s what a bad month actually feels like. It’s not an intellectual exercise. It’s a full-body experience.

”I’ll get back in when things settle down”

This is the sentence I heard more than any other in March 2020. Friends, family, people at coffee shops talking about their investments. “I’m going to cash, just until things settle down.”

The problem with “when things settle down” is that it never comes as a clear signal. There’s no announcement. No bell. The market doesn’t send you a notification that says, “OK, the scary part is over, you can invest again now.”

What actually happens is this. You sell during the panic. The market keeps dropping for a bit, and you feel smart. Then it starts recovering. But the headlines are still bad. Cases are still rising, businesses are still closed, unemployment is at record levels. Nothing feels settled. So you wait.

The market recovers another 10%. Now buying back in feels wrong because you’d be buying higher than where you sold. So you wait more. It recovers another 15%. Now you’re watching from the sidelines as your “safe” cash earns nothing and the market erases the crash without you.

One friend sold everything in late March 2020. The S&P 500 hit its bottom on March 23rd and then had one of the fastest recoveries in market history. By August, it had fully recovered. My friend didn’t buy back in until November. He locked in his losses, missed the recovery, and ended the year behind where he would have been if he’d done literally nothing. I have other friends who weren’t even invested, waiting for a crash to get in. They didn’t buy either.

The anatomy of a panic sell

Here’s what I’ve noticed watching people sell in a panic, across multiple downturns. It always follows the same pattern.

First, they watch the decline for a few days and tell themselves they’re fine. “I’m a long-term investor. I can handle this.” Then the decline accelerates. The self-talk shifts to, “This could get a lot worse.” They start checking their portfolio multiple times a day. Every check makes them feel worse.

Then there’s a trigger. It might be a single bad day, or a scary headline, or a conversation with someone who already sold. Something tips them from “I’m uncomfortable but holding” to “I need to stop the bleeding right now.”

They sell. Immediately, they feel relief. The number has stopped going down. They’re “safe.” That relief is real, and it’s powerful. It’s also the most expensive emotion in investing.

Because what they’ve actually done is convert a temporary decline into a permanent one. While they were invested, the loss was on paper. The moment they sold, it became real. And now they face the impossible task of figuring out when to get back in.

Why reviewing your worst moments matters

This is the part most people skip. After a bad stretch, the natural instinct is to move on. Don’t think about it. Don’t look at it. Just keep going.

But your worst months contain your best lessons.

If you go back and look at what you did during March 2020, or late 2022, or any rough period, you’ll learn something about yourself that no book or article can teach you. Did you sell? Did you hold? Did you buy more? Did you stop checking entirely? Did you check obsessively?

There are no wrong answers here, by the way. The point isn’t to judge yourself. The point is to know yourself. Because there will be another bad month. There always is. And when it comes, you want to be operating from experience, not from instinct.

If you know that your pattern during downturns is to panic around day five, you can plan for that. Set a rule: no trading during the first two weeks of a decline. If you know you start making emotional decisions when you check your portfolio more than once a day, delete the app from your phone during volatile stretches. If you know the dollar amount hurts more than the percentage, stop converting.

The people who came out ahead

The people I know who did best through March 2020 did one of two things. Either they did absolutely nothing, or they bought more. Both required ignoring every instinct they had.

One friend set up automatic contributions and refused to check his portfolio for three months. He told me later that he didn’t trust himself to look at the numbers and not react. So he removed the option entirely. When he finally logged in, his account was higher than it had been before the crash. He hadn’t done anything clever. He’d just stayed out of his own way.

A bad month doesn’t feel like a learning opportunity when you’re living through it. It feels like a crisis. But if you keep a record of what happened and how you responded, you’ll have something invaluable the next time the market decides to remind everyone that stocks can go down. You’ll have proof that you’ve been here before. And you made it through.