By Denise French, ABV, EA, CVA/MAFF, CDFA, CRPC
Women often face unique financial and emotional challenges after divorce, especially when coping with stock market volatility. The key is knowing that market downturns are normal, recovery is typical, and there are practical ways to protect both wealth and well-being during these times.
Stock Market Ups and Downs
History has shown that stock market declines are a normal part of investing. While declines have varied in intensity and frequency, they have been somewhat regular events. It may also reassure you that markets have always recovered from declines. Although past results don’t guarantee future results, remembering that downturns have been temporary may help ease your fears.
The Market Always Comes Back
One empowering truth is that the market has always recovered from every decline in modern history, sometimes quickly, sometimes slowly, but always to newer highs. Recent bear markets have rebounded within 4-18 months, though recoveries from crashes can take years. Historical averages show that after a market drop, stocks post positive returns within a year or two, rewarding those who remain invested.
Protecting Wealth and Managing Fear
To safeguard assets and emotional health:
- Diversify across stocks, bonds, and cash to buffer volatility.
- Maintain a long-term view; avoid reviewing accounts during news-induced panic.
- Lean on trusted advisors and trusted friends for support rather than taking impulsive action.
- Pause before reacting—remember, corrections usually recover in months, not decades.
- If portfolio declines make nerves unbearable, the portfolio is likely too aggressive for risk tolerance. Adjust allocation only in calm periods, not during a crisis.
Why Selling in a Downturn Is the Worst Move
Selling investments out of fear during downturns locks in losses and misses out on the inevitable rebound. Every major market crash was followed by a rally, and those who endured the hard times were rewarded with new highs. If market swings inspire panic-selling, consider if the current investment approach is too risky and make changes during stable periods.
Controlling Financial Anxiety
Try these steps:
- Write a calm, clear investment plan to follow in uncertain times.
- Limit news consumption when headlines become alarming.
- Remember downturns are temporary, and recovery is historically consistent.
- Seek out supportive financial education and communities.
Final Thoughts from a Female Advisor
After divorce, financial independence and security are vital. Preparing for volatility with an empowering mindset and disciplined plan will not only protect wealth but help maintain peace of mind as the market rides its natural ups and downs. The key is not to go it alone: use your advisory relationships, community supports, and self-care routines to stay resilient and grounded. Smart investors know that patience—especially in tough times—is the greatest virtue of all.