It seems that human beings are generally “poorly wired” to be investors. The human brain automatically goes on RED ALERT when potential threats appear.

The reptilian part of the human brain (“lizard brain”) automatically activates our primal fight, flight or freeze reactions.

This part of our brain is highly impacted by what is negative, alarming, incredulous. In other words, whatever could be threatening.

It tends to overweight most recent events. It brings out FEAR and STRESS.

This was great when we as cavemen were confronted by a sabertooth tiger or a T. rex, but not for much of modern-day life — especially when it comes to investing.

And while history may not exactly repeat itself, as Mark Twain said, “it often rhymes.” So looking back at long periods of past experience can be important.

And if your reptilian brain hasn’t been active recently, you must have been stranded on some desert island with no news. Financial markets around the globe have experienced significant volatility since April 2, 2025, when President Donald Trump first announced tariffs, with substantial losses in the first few days and then seeing some recovery.

Watching $1million in the Dow Jones Industrial Average from April 2 would see your balance drop to about $920,000 in just three days.

All of this might well have gotten your “lizard brain” fully engaged and ready to run for cover.

And the road ahead is more unclear than ever right now. Take a look at CNN’s Fear & Greed Index as of April 15:

In previous columns, I’ve noted how Fear of Missing Out (“FOMO”) and Fear of Being In (“FOBI”) can be powerful and cause investors to make poor decisions. Right now, both emotions seem to be in high gear for most folks.

With so much uncertainty, now doesn’t seem like the time to hit the gas, thinking you’re buying low, or to panic by dumping all your stocks for fear they will fall further.

Now seems like a good time to take a deep breath and do some real thinking.  

• What do you own? Take a look at how much money you actually have in each basic asset category. Stocks? Bonds? Cash? Other?
  
• Why do you own them? Review why you have holdings in each asset class. Stocks for long-term growth and income? Bonds for income and safety? Cash for liquidity to meet short-term needs?

• Does the current mix of assets (asset allocation) fit your needs? Is it consistent with your financial goals, time horizon and risk tolerance?

That third question can be tough to answer, especially during periods of higher volatility.

Over my many years as a financial adviser, I had clients tell me they were very risk tolerant when markets were soaring only to be nearly in tears when markets tumbled, saying they couldn’t handle losing another dollar.

Those were the times when I more than earned my fees, coaching clients to stick with the well-diversified portfolio we had crafted for them based on their goals. Time after time, it turned out it was the “sticking” that paid off the most.

Lessons from the Great Recession of 2007-2009, and more recently the COVID-19 pandemic, reinforced this.

While very difficult advice to give — and for clients to take —staying the course was handsomely rewarded, while losses for the few who didn’t heed our advice were significant.

A key is having a strategy that your emotions can tolerate.

Here are a couple of tools you might find helpful in finding a strategy that makes sense in meeting your financial goals, given your time horizon, and trying to assess how much volatility you can live with (note I did not say enjoy).

1. Risk profile questionnaires. Many money managers and advisers provide profile tools that can help guide you toward an appropriate strategy. They aren’t perfect by any means, but they can steer you away from strategies that are way too aggressive or conservative. Good examples can be found at Schwab and Vanguard. Your providers and advisers may have their own versions.
   
2. The “Dice Game.” More than a decade ago, I worked with Russell Investments chief strategist Ernie Ankrim on helping clients figure out how much risk they could handle. We wanted to find a way to demonstrate what investing might actually feel like, not just a questionnaire. We came up with a game that combined sophisticated Monte Carlo simulations to create a range of annual returns for various asset-allocation strategies — and the rolling of two dice. The range of potential returns were based on 30 years of market history (1984-2013), and we used red and white dice for rolls. The nearby chart shows the range of expected one-year returns for a balanced 60/40 mix of stocks and bonds.

Let’s assume you start with a $1 million portfolio. Now, roll the two dice.

Let’s say you roll Red 5 and White 2. Looking at the chart, you’d see a return of +12.4% and your portfolio would now be $1,124,000.

Next roll, you get Red 1 and White 3 so, looking at the chart, your return would be -3.4% —and your portfolio would now be $1,085,784.

But what if you were very unlucky in Year Three and rolled Red 1 and White 1. You’d have a 30.3% loss and your portfolio would be down to $756,791.

This can simulate what it can feel like investing, when you have no control over the multitude of factors that impact market returns.

Your dice rolls may be lucky, unlucky, or more likely a combination. And the order of returns can have a huge impact on your outcome. Better to be lucky early and less lucky later.

Regardless, you can expect both good and bad years just like the chart represents.

One important note: Most forecasts of future market returns are lower than those for the 30-year time horizon from 1984 to 2013, but the idea shown still works.

We actually had couples and even small groups try this at the same time. You’d see some with big gains and smiles, with others experiencing sizable losses and calling the game “stupid.”

1. Your own past experience. Think about how you felt during past periods of big volatility. How did you behave during the dot.com bubble and bust? How did you deal with the huge downturn during the 2007-2009 Great Recession when stock markets lost almost 50% of value and then roared back? What about the big downturn when the COVID-19 pandemic started? Were you prudently positioned BEFORE these events — and, if so, did you stick with your plan or make dramatic changes based on fear or greed?

Let me share a bit of my own investing plans. My wife and I are both retired and in our 70s. We’re in good health and enjoying a very active retirement.

Our financial projections show a very high probability of never running out of money—and in fact being able to leave a meaningful legacy.

We take income from our investments to meet living costs, fund travel, and give to both charity and family without having to invade principle.

We don’t need a lot of growth, just enough to, hopefully, keep up with inflation.

And we prefer not to see dramatic swings in portfolio values — as a good night’s sleep is a valuable commodity. So, we have about 50% in stocks, 45% in bonds and 5% in cash.

Stocks are globally diversified — bonds are high quality — and all allocations have a keen eye on keeping costs and taxes low. We don’t worry that someone else might earn a higher return, or worry (too much) when markets fall.

Here’s hoping you can find a strategy that meets your financial goals and that you can stick with. Then, you can just turn off the TV and take a walk.