It’s no secret that I have a lot of respect and admiration for Warren Buffett. His investing track record is enough to make him worthy of immense admiration but beyond that, I admire the way he thinks and talks about investing. It’s simple, to the point, laced with humor, and usually rather accurate!

When markets get volatile (see the past several weeks), I find myself revisiting “Warren-isms” I’ve picked up over the years. His words and quips always help ground me. This one I’ve been reciting this week is: “The trick is, when there is nothing to do, do nothing”

Warren is very well known for spending most of his days reading (estimated at ~500 pages a day), thinking, analyzing, and very rarely taking any immediate action as a result of his efforts. He isn’t exactly doing nothing – but he is not taking action just for the sake of being busy or to prove that he did in fact do something. As he says above, based on all the analysis and facts presented, if there is nothing to do – do nothing.

This approach is certainly counterintuitive to the world we live in. More and more, we seem to be hard-wired for action and productivity and encouraged (if not downright shamed into) seeking out immediate-reward dopamine actions whenever possible (hello social media, online gambling, prediction markets, etc). We are made to feel badly if we do not produce some tangible proof of activity.

These instinctual impulses to act are only exacerbated when markets are volatile and moving up and down 1-2% in a single trading day. Those wild swings can make you feel as if you should have done something (ie: gosh, why didn’t I buy in yesterday before the market went up 1%?) or make you feel like you need to at the very least do something now before you miss another chance or before another downdraft occurs.

I understand the impulse. It’s very valid – and in some ways, it’s in our wiring as humans (hello fight or flight instincts). However, in times where markets are moving on macro headlines as they are right now (due to the ongoing conflict in Iran and resulting disruptions to global energy markets), it is perfectly justified for you to simply take all of this in and do nothing.

I’m not advocating being complacent – quite the opposite. In times of strife, it’s important for all of us – as humans and investors – to remain aware of what is happening and consider the risks to our financial plans. But the time to build an ark is before a storm – not during it. Large adjustments to positioning or allocations during times of extreme volatility rarely work out as you hope and a well designed financial plan has built-in protections for such events before they even begin.

If you must take action to calm your fears and simply “do something,” I encourage small and tactical moves – such as harvesting losses for tax reasons, deploying new cash in a methodical manner, increasing your employer-sponsored retirement savings plan contribution rate, or perhaps trimming outsized winning positions (such as energy sector holdings) to rebalance those in relation to your other holdings. Think small, measured, methodical steps – not massive overhauls.

No one knows how this will play out so staking a financial plan that is designed for decades on a few days or weeks of market action is ill advised.

Just for a while, until things calm down, let’s be like Warren. Think, breathe, read, go for a walk, analyze, slow down – and then simply do nothing.

Onward we go,