If you've checked your 401(k) balance this month, you probably didn't like what you saw.
Headlines about tariff uncertainty, trade policy shifts, and rising market volatility are everywhere right now. The VIX — Wall Street's so-called "fear gauge" — has spiked past 26. Cable news is running countdown clocks. Your coworker just told you he moved everything into his money market fund "until things calm down."
And something deep inside your brain is whispering:Maybe I should do the same thing.
That whisper? It's not wisdom. It's biology. And if you listen to it, it could cost you tens of thousands of dollars over your lifetime.
The Panic That Feels Like Logic
Let me tell you about a woman I'll call Linda. She's 54, works in hospital administration at a major health system — think CommonSpirit or Children's Hospital of Philadelphia — and has been contributing to her 401(k) for over twenty years. She's done a lot of things right. She increased her contributions every time she got a raise. She took advantage of her employer match. She even bumped up to catch-up contributions after she turned 50.
Then one Monday morning in early March, she opened her retirement account app and saw a number that was $38,000 lower than it had been six weeks earlier.
Linda didn't call her advisor. She didn't review her plan. She logged into her 401(k) portal and moved her entire balance — every dollar — into a stable value fund.
She told herself she'd move it back "when things settle down."
Here's the problem: Linda just locked in her losses and stepped out of the market right before it had a chance to recover. And she's not alone. This exact pattern plays out every single time markets get turbulent, at every company, in every 401(k) plan, across every age group.
Your Brain Isn't Built for Investing
As a Behavioral Financial Advisor, I spend a lot of time studying why smart, capable people make decisions with their money that don't match their goals. The answer almost always comes back to how our brains are wired.
Here are three behavioral traps that are especially dangerous right now:
Loss Aversion
Research in behavioral finance shows that the pain of losing money is roughly twice as powerful as the pleasure of gaining the same amount. That means a $10,000 drop in your 401(k) feels twice as bad as a $10,000 gain felt good. When markets fall, this asymmetry pushes people to "stop the bleeding" — even when doing nothing is almost always the better move.
Herd Mentality
When your neighbor, your coworker, or your brother-in-law tells you they pulled out of the market, it creates social proof. Your brain interprets that as safety in numbers. But in investing, the herd is almost always late — they sell after the drop and buy after the recovery, which is the exact opposite of what builds wealth.
Recency Bias
Whatever happened most recently feels like it will keep happening forever. If your portfolio dropped 8% this month, your brain projects that forward — "If this keeps up, I'll lose everything." But markets don't move in straight lines. Exposed to volatility from tariff disputes, trade renegotiations, and global uncertainty, the market has still historically rewarded those who stayed invested through the noise.
What Linda Should Have Done Instead
If Linda had called before making that move, here's what we would have walked through together:
Step 1: Breathe and look at the calendar, not the screen.Linda is 54. She likely won't touch this money for at least 10 years. A 10-year window has historically smoothed out even the worst downturns. Her timeline hadn't changed — only the headlines had.
Step 2: Check your allocation, not your balance.The real question isn't "how much did I lose?" It's "does my mix of investments still match my risk tolerance and my retirement date?" If it does, the plan is working. If it doesn't, you make a thoughtful adjustment — not a panicked overhaul.
Step 3: Remember what volatility actually is.Volatility is the price of admission for long-term growth. If there were no risk, there'd be no reward. Every dollar of growth Linda earned over the past 20 years came because she accepted temporary discomfort along the way.
Step 4: Automate and tune out.Linda's best move during turbulent markets? Keep contributing. Her regular 401(k) contributions are now buying shares at lower prices — which is exactly what you want when you're still accumulating. This is dollar-cost averaging, and it works precisely because markets go down sometimes.
This Isn't Just About the Market — It's About You
Here's what I've learned after working with families across multiple generations in South Jersey and beyond: the biggest risk to your retirement isn't the market. It's your reaction to the market.
A well-built financial plan already accounts for downturns. It already assumes there will be scary months and scary headlines. The plan doesn't need to change every time the news does.
What does need to happen is a conversation. When you feel the urge to make a big change — to move to cash, to stop contributing, to "wait it out" — that's the moment to pick up the phone and talk it through with someone who understands both the numbers and the psychology behind your decisions.
That's what a behavioral finance-driven approach is all about. Not just managing your money, but helping you manageyourself— so your long-term plan survives your short-term emotions.
What You Can Do This Week
Whether you're an employee at Apple, FedEx, Northrop Grumman, Comcast, or a small business right here in Marlton, here are three things you can do right now:
Don't log in to make changes when you're anxious.Check your balance if you must, but don't touch your allocation when your heart rate is up.
Review your beneficiaries and contribution rate instead.These are productive actions that move your plan forward without reacting to noise.
Schedule a conversation with an advisor who gets it.Not just the numbers — but the human side of financial decisions.
If you're not sure whether your current 401(k) allocation still fits your goals and timeline, or if you've already made a move you're second-guessing, reach out to our team at Genesis Wealth Advisor Group. We specialize in helping people make better decisions — not just better investments.
Frequently Asked Questions
Should I move my 401(k) to cash during a market downturn?
In most cases, no. Moving to cash locks in your losses and takes you out of the market during a potential recovery. If your investment mix still matches your risk tolerance and retirement timeline, staying the course is usually the stronger move. Talk to a financial advisor before making any major changes during volatile periods.
What is a Behavioral Financial Advisor?
A Behavioral Financial Advisor (BFA™) is a financial professional trained to integrate traditional financial planning with insights from behavioral psychology. Instead of just managing portfolios, a BFA helps clients recognize and manage the emotional biases — like loss aversion and herd mentality — that can lead to costly financial decisions.
How does Genesis Wealth Advisor Group help with 401(k) accounts?
Genesis Wealth Advisor Group provides individual 401(k) management for employees at major employers across the country — including hospitals, defense contractors, airlines, tech companies, and more. We review your current allocation, assess your retirement timeline, and build a strategy that aligns your investments with your goals and values. Contact us to learn how we can help with your specific plan.
About Genesis Wealth Advisor Group, LLC: Genesis Wealth Advisor Group, LLC is an independent fiduciary financial planning firm headquartered in Marlton, New Jersey, serving clients across multiple states with retirement income planning, employer plan guidance, and holistic wealth management services.