Brian Fantana: “They've done studies you know. Sixty percent of the time it works every time.”
– Anchorman: The Legend of Ron Burgundy (2004)
In the middle of the last century some smart economists came up with mathematical models to figure out the "best" way to invest. In these models investors were totally rational. They didn't do stupid things. The math in the models was hard, which made the economists happy. They called their invention “modern portfolio theory” and were awarded Nobel prizes for it. 
Some decades later another group of smart professors came along and said “Wait…people aren't rational at all.” They found that we humans have lots of “irrational” biases. Here are some examples of what they found: Most people would rather avoid losing $10 than win $10, even if the chances of winning are higher. When people make decisions, they tend to give more weight to recent experiences than longer-ago ones. People tend to accept facts which confirm their existing beliefs and reject those which contradict them. And many more. The professors became known as “behavioralists” and they too got some Nobel prizes. 
Why am I going on about this? Because being human can get in the way of making smart money decisions. We’ve already talked about ways to automate saving, control credit card use, and use a budget to keep spending in check. It's just as important to avoid impulsive decisions when investing.
Say you invest in the stock market in order to accumulate a retirement kitty twenty years from now. Because stocks are tied to the economy they have gone up on average. In fact, there has never been a 20-year period where the stocks didn't make money, even after inflation. Knowing this, maybe you shouldn't really worry if the stock market bounces around in the interim. But will you have the stomach to weather the ups and downs?
As I write this in early 2020, investors are being tested. Say you diligently spent ten years putting away $500 a month into your 401(k) and invested it in the stock market. You've earned a respectable 8% return on average, which means you have accumulated a total of $91,500. Nice. $100,000 seems within reach.
On February 21, 2020 you wake up and concern about the coronavirus is growing. The market drops three days in a row and your balance is down to $84,700. You tell yourself you’re in it for the long term and carry on. The market bounces around over the next eight days, with big one-day swings up and down. On March 9th, there’s another big drop; your balance is now $74,500. Should you maybe move your money into something safer to preserve what you have left? After all, you just lost almost three years of saving $500 a month in the space of three weeks. You decide to keep the faith. Another few days of wild swings and on March 16th the market drops another 12%. By the end of the week your balance is $62,500. Thirty-two percent of your account. Up in thin air. In just one month. On Facebook your friends are talking about how they “got out” just in time. You feel like an idiot. 
What do you do? Will the market lose another 30% or will it rebound? Nobody knows. It’s ironic but true: in investments you are tempted to sell when things are cheaper and buy when they are more expensive.
The challenge in this situation—and it’s a formidable challenge—is to swallow hard and continue saving and investing (buying). In the past, the stock market has always recovered—sometimes in a matter of months, but sometimes only after many years. You don’t know whether this will be true in the future. There is a chance that it won’t be. But one thing is certain: if you’re not invested, it definitely won’t be true for your portfolio.
(Of course if your earnings picture has changed—for example, if you’re at risk of losing your job, you may need to reassess your goals, potentially boosting your emergency fund first.)
In a scenario such as this, let inertia work for you. One way to reduce the impulse to sell is to remove the stimulus: stop looking at your account balance. This is good advice even during normal times. There is no reason to look at your investment balances more than once a quarter or even once a year when your goal is years or decades in the future. Long-term investing can be really boring. You can go for years without doing anything and be wildly successful. The temptation is to futz around with your investments, buy a little of this, sell a little of that. Avoid tinkering just to “do something.” This is why having your portfolio on your phone is a bad idea. Apps such as Robinhood, which “gamify” trading, can be dangerous to long-term investing success.
Inertia is also your friend when it comes to saving, and in particular retirement plan contributions. Set up your 401(k) to invest and go away. You’ll automatically buy more stocks when the market is down and fewer when it is strong—without making any conscious decision.