How to stay calm in a stock market pullback: 2 ideas 🧘🏻

The stock market started this month with four straight days of significant decline. The S&P 500 index fell more than 2.5%, while the Nasdaq 100 index fell more than 4.5%.

Granted, these numbers don’t look very big on paper. They’re not a bear market, which is defined as a 20% decline in an index, and they’re not even a correction, which is usually defined as a 10% drop.

But I happened to be putting a bunch of uninvested cash into stocks during this stock market pullback, and those four days of decline felt very scary.

It’s unlikely to be the last downturn of 2026. Between geopolitical uncertainty, tariff threats, potential government shutdowns, dollar-value volatility, and anxiety about the high valuations of AI and other tech stocks, we can probably expect more small downward lurches in the major stock indexes this year — even if none of them officially enter correction or bear market territory.

Here are two strategies for keeping your cool during a stock market pullback — and potentially even profiting from it.

Although the markets swooned in the first four trading days of February, both the S&P 500 and the Nasdaq 100 jumped by about 2% on Friday, Feb. 6. By the end of the following trading day, the S&P 500 had recouped nearly all of its losses, leaving investors who had bought the dip (including yours truly) with a small profit.

If you’re in my line of work — writing about investing — it’s easy to pontificate about the merits of “buying stocks while they’re on sale.” And ultimately, the resolution of this recent stock market pullback did prove that point. But when you’re actually putting your cash into stocks with falling prices, it’s not easy at all.

Buying on the way down feels awful. I was reminded of that when I deployed some cash savings into the market at the beginning of this month. Putting my money into my ETFs, and then watching their value steadily tick down throughout the day Monday, Tuesday, Wednesday and Thursday made me feel like I was just flushing money down the drain.

But if you’re investing for the long-term, it works. The math doesn’t lie. Even during severe downturns — ones where the market doesn’t perk back up a couple days later — buying on the way down is one of the best things you can do for your portfolio’s long-term performance.

As a reminder, you should only buy the dip with cash you don’t need right away for expenses like rent, food or emergency savings; the volatility of the stock market is one reason for the rule-of-thumb that you shouldn’t buy stocks with money that you’ll need within the next five years. But for longer time horizons, buying during bad times can be very profitable.

We recently updated our “Should I Buy Stocks Now” page with a new calculator that shows just how quickly your account can recover from a downturn if you just keep adding money.

It’s okay if you don’t have the gumption to buy the dip during a stock market pullback. I barely did at the beginning of this month. Fear of loss doesn’t make you a bad investor, it just means you’re human.

But there is one emotional reaction you really want to avoid during a time like early February, which is selling on the way down. This often locks in a loss — or at least a suboptimal return. It may also increase your cost basis if you try to buy back in after the market recovers, as it rapidly did at the beginning of this month.

If you’re the kind of person who is liable to sell when things get scary, don’t beat yourself up about it — but consider taking steps to limit your ability to panic and pull your money out.

One idea is to use a robo-advisor, which allocates your money between a diversified set of ETFs and rebalances them for you over time. If you’re not investing in a tax-advantaged account like an IRA, some robo-advisors can even optimize your investment tax situation through techniques like tax-loss harvesting and direct indexing, all without input from you.

A major appeal of robo-advisors, particularly for the more skittish among us, is that they make it possible to invest without even looking at your investments for years on end. That can help reduce the temptation to do impulsive things during a market blip.

Robo-advisors often have higher fees than self-directed investment accounts, and not every robo-advisor offers the same features (particularly when it comes to tax management). Click here to see NerdWallet’s picks of the best robo-advisors.

Another option is to work with a human financial advisor, who can offer a more personalized version of these services — plus a real person you can actually talk to when you’re feeling uncertain about the market or your financial position. Human financial advisors often charge higher fees than robo-advisors, but you often get more tailored investment guidance in exchange. NerdWallet also has a roundup of the best financial advisor firms.