Calm Minds in Volatile Markets
What The Psychology of Money Teaches Us About Staying Rational When the World Isn’t
Hello everyone!
Welcome to the final stretch of 2025. We’re now a month into Q4, and as always, autumn seems to bring a fresh round of uncertainty.
Once again, volatility is at the forefront of investors’ minds — this time fueled by the hangover from rate cuts that came faster than expected, a tug-of-war between inflation data and growth worries, persistent questions over whether the AI boom is sustainable, and another wave of China tariff headlines shaking tech names.
Earnings season hasn’t helped either. AI darlings are swinging ten percent in a day, while the rest of the market just drifts sideways.
But as all of this noise continues to rattle headlines and sentiment, I’ll say what I’ve said since the early days of HL Financial Strategies:
Volatility isn’t chaos anymore — it’s just background noise.
And that’s where discipline either compounds or collapses.
The Seduction of Pessimism
Recently, a colleague recommended that I read The Psychology of Money by Morgan Housel. While I haven’t gotten around to it yet, I’m familiar with many of its core ideas — and one quote in particular stuck with me:
“Pessimism is the easiest way to sound smart.”
That line has aged perfectly. Every chart online these days seems to forecast either an imminent crash or a euphoric melt-up. There’s rarely any middle ground.
Pessimism sells because it feels analytical — especially when markets are hovering near all-time highs. It’s easy to stir up fear, because surely it can’t just keep going up, right?
“The Fed’s cutting too fast.”
“China’s slowdown means recession.”
“AI’s a bubble.”
The narratives keep changing, but the tone rarely does: fear disguised as insight.
And that’s what’s been on my mind lately. Beneath all the analysis, technical charts, predictions, and market commentary lies a much simpler truth — money is emotional before it’s mathematical.
Tell me if this sounds familiar — because it’s happened to me more times than I’d like to admit:
You do everything right. You research the fundamentals, study the charts, spot the pattern clear as day… then exit too early, take a small loss, and watch the trade play out exactly as you expected. The move happens right after you’re out. So, frustrated, you jump back in — only for it to reverse again and lose even more.
That’s not a lack of skill. That’s emotion hijacking execution.
Reasonable Beats Rational
In theory, the rational move this quarter might’ve been to hedge everything — buy puts, sell premium, sit in cash.
But the reasonable move, at least for me, was to keep following the plan.
And that plan just delivered my two best trading months ever.
No new strategy, no over-optimization. Just patience. The same Wheel framework, tighter risk control, smaller position sizes, wider strikes, and a clear reminder that I’m not here to impress the market — I’m here to survive it.
When I focused less on being “right” and more on being consistent, the results spoke for themselves.
That’s exactly what Housel meant: the best investors don’t aim to be rational — they aim to be reasonable enough to stay in the game.
When Volatility Returns
Rate cuts or not, the market’s message is the same: control what you can, and ignore what you can’t.
Here’s what’s been working for me lately:
Size reasonably. Even when it’s tempting, stick to your rules. Don’t over-leverage. Risk tolerance is everything — no matter how confident you feel about a setup.
Give yourself time. Widen your strikes. Push out expiration dates. Let your trades breathe instead of forcing them to work on your schedule.
Always secure profits. Big or small, follow your plan. If your rule is to take profits at 20–25%, do it — even if the trade later runs 40%+. Consistency beats perfection. Hitting singles and doubles will always win more games than swinging for home runs every at-bat.
Hold cash. Give yourself the option to “load up” when real opportunity appears. Optionality is underrated — and often the most powerful position you can have.
Simple. Boring. Repeatable.
And quietly effective.
Freedom Is the Ultimate Dividend
There’s a line from The Psychology of Money I keep coming back to:
“Wealth is not about having more money. It’s about having more control over your time.”
That idea has shaped my message since the very beginning of HL Financial Strategies.
As I prepare for the next chapter of my life, I feel more confident than ever that freedom isn’t about yachts or Lambos — it’s a mindset built on stability. And that stability comes from a trading discipline that’s given me something far more valuable than status: the ability to no longer rely on a corporate job that was quietly taking away my time and peace.
The past two months were proof of that. Calm execution in a noisy market doesn’t just grow capital — it builds confidence and clarity.
Stay safe out there, friends. Enjoy the rest of 2025, and best of luck to all.