How to weather this stock market storm

keep calm and carry on.

For many individual investors, this is more than just a letter or message on a T-shirt. It has become a way of life.

With US stocks down more than 14% and the overall bond market down nearly 9% so far in 2022, I asked non-professional investors this week how they handled the crash.

Wall Street views retail investors as a flock of naive and unrealistic optimists who chase hot performances in good times and flee stocks at the first sign of trouble.

Talk to real people and you’ll quickly realize that this is a silly cartoon.

Instead, many Main Street investors are orderly and thoughtful. It has been hardened by its experience of ups and downs markets, much as steel is made stronger by tempering it through heating and cooling.

Think of the apt name for Lyle Stillman, 43, trumpeter for the Cleveland Orchestra. Investing began in 2009, right after the end of the global financial crisis.

A few years ago, he bought two wooden statues of a bull and a bear for about $5 each. He says he intentionally uses them as props, to “reverse everything” and “protect my business from me.”

“I know it when I see red [as stock prices fall]”If I allow my emotions to take over, I will stop the process,” says Mr. Stillman. “So I put the bull next to my computer to remind me that when things go downhill in the short term, it’s an opportunity to make more money in the long run.”

Conversely, “When the market goes up, I get a shock of excitement, and I know I might be tempted to spend more money on it,” he says. “Then I put the bear in there, to remind me that future returns are likely to be lower.”

Joy Bishop, 73, who lives near Sarasota, Florida, is the former owner of a small manufacturing company. She keeps accurate investment diaries to record her thinking.

When stocks go up, she asks herself, “If the market went down 20% tomorrow, what would I wish I had changed?”

Last November, near the peak of a bull market, its shares trimmed about 10%. Instead of chasing after a hot performance, I backtracked on it.

For Mrs. Bishop, this year’s downturn doesn’t look like a disaster; You think it’s an opportunity. With stocks dropping, you are preparing to buy.

“I’m looking for some good names that are up for sale,” she says.

Paul Jacobs, 63, who lives near Austin, Texas, is a former CFO in the energy industry. His experience in finance did not turn him into a merchant. Instead, he used spreadsheets to put his portfolio on autopilot.

This gives him what he calls “Stoic” peace of mind, no matter what the markets do. “I focus on what I can control,” he says.

Mr. Jacobs owns a handful of exchange-traded funds that simulate the investment exposure of the Vanguard Target Retirement Portfolio.

When an asset moves up or down sharply, it rebalances, selling enough of what went up and buying enough of what happened to restore its holdings to their predetermined proportions.

In mid-May, he sold some of his short-term inflation-protected bond fund and bought conventional stocks and bonds.

This process is so automatic that it “allows me to ignore everyday noises and only take action when necessary,” says Mr. Jacobs.

Jim Woods, 68, an orthodontist in Paducah, Kentucky, prefers individual stocks over mutual funds or ETFs.

It makes Warren Buffett sound like a day trader. Dr. Woods kept one stock, which is the computer services located in Paducah a company ,

For 42 years he held Apple a company

for a quarter of a century.

Dr. Woods was adding to his existing holdings and buying new ones with lower prices.

“I used to overreact the market to the upside and the downside as well,” he says. “Trade makes no sense to me. I pretty much made my decision that I don’t really intend to sell any of these stocks.”

In 2021, new online merchants rose to instant fame and fortune with stocks like AMC Entertainment Holdings a company

and GameStop corp.

He made huge gains and then fell to the ground.

Their often reckless behavior drew ridicule on Wall Street (even as the pros failed to keep pace with the amateurs).

These itchy thrill-seekers weren’t your typical solo investors. They were so radical that a home-marginalized epidemic had stimulus checks for their cremation.

The people you spoke to may also be unusual. They all subscribe to my newsletter, which seeks to take a long-term perspective on the markets.

The general public is more fickle — although not as fickle as Wall Street likes you to think. Since March 31, investors have taken more than $51 billion from mutual funds and ETFs, according to the Investment Company Institute. That sounds like a lot, but it’s less than a third of 1% of total assets in equity funds.

In the grueling bear market of the 1970s, individuals dumped stocks year after year, in slow motion, as if fleeing a sinking fleet of ships.

Could this happen again? It may be. But it will take much more than this year’s dips to shake the resolve of today’s investors.

More smart investor

write to Jason Zweig at smartinvestor@wsj.com

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