Everyday Money Habits · Worksheet

Your calm-day market plan.

A falling market is normal, not broken — the drop only turns into a permanent loss if you sell during it. This sheet is written on a calm day, while nothing is wrong, so the next red screen meets a standing plan instead of a mood.

Beginner

Name

Date

Audience: For an investor writing the plan before the drop
Time: About 15 minutes
Materials: A calm day · a pen

Objective

Write your standing rules for the next market drop — decided on a calm day, before a red screen can negotiate with you — and sign them.

Use this when

Markets are fine right now and you want the next drop to arrive pre-decided.

1 · What normal looks like

A dip — around 5%Background noise. It happens a few times in a normal year.

A correction — 10% or moreAbout once a year to once every 18 months. Prices coming back down after climbing too fast — not a verdict on your future.

A bear market — 20% or moreRoughly every three and a half to six years. The average one falls around 35% and takes nine or ten months to reach bottom.

Illustrative — the shape of a drop and recovery, not a projection. So far, every U.S. market drop has come back: 2000 took about seven years, 2008 about five and a half, 2020 about six months, 2022 about two. Markets recover; individual stocks sometimes don’t. That’s what the carve-out below is for.

2 · The arithmetic of waiting

Why selling low is so expensive: lose 10% of $100 and you hold $90, and a 10% gain on $90 adds back only $9. The climb out is always steeper than the fall.

A 10% dropneeds an 11% gain to break even

A 20% dropneeds a 25% gain

A 35% drop — an average bearneeds a 54% gain

A 50% dropneeds the market to double

And the climb starts early: 76% of the market’s best days in the last 30 years came during a bear market or the first two months of the recovery — sellers miss the rebound because it arrives while things still feel bad.

3 · My standing rules

Tick each rule you’re adopting. These aren’t a forecast about when a drop ends — they’re what you do until it does.

I don’t sell during a drop. A red number becomes a loss only at the moment I sell.

My automatic contribution keeps running — the same dollars buy more shares while prices are down.

If the budget allows, I’ll raise it by a percentage point or two, not pause it.

No extra log-ins. My next look at the balance is my usual scheduled one, not tomorrow’s headline.

My checkpoint cadencea scheduled quarterly look is plenty

When I feel the urge to act, I’ll do this insteadreread this sheet, take a walk, call someone — name it

4 · The honest carve-out — when this plan applies

Staying the course is the right move only when both boxes are true:

This money owns a broad, diversified index — not a single company.

I won’t need this money for roughly five years or more.

If either box won’t check, the money was today money (dollars you’ll spend soon) parked in a tomorrow-money place (dollars with years to grow). The fix is pointing thenext dollars at savings — not selling the rest in a panic.

5 · Sign it

A signature turns a good intention into a standing rule. A red screen doesn’t need a response — it needs your usual one.

Signed, on a calm daysign it now, while you’re calm

My next scheduled look at the balanceput the date here, not in the app

6 · Reflection

One sentence to your future self, for the red day:

Based on the Guide to When Markets Fall.