In this episode, Taylor and Mike explore why a small pullback can feel so painful (even when your portfolio is still up overall) through the lens of high water marks and investor psychology. They break down how anchoring, loss aversion, and recency bias lead us to fixate on peak values, and why the idea of “average returns” often misleads investors into expecting smooth, predictable growth. Using examples from the S&P 500, gold, and Bitcoin, they highlight how normal volatility can feel like failure when expectations are off, and share practical ways to stay grounded: focusing on your long-term plan instead of recent highs, understanding the nature of the assets you own, and recognizing that successful investing isn’t about avoiding volatility, but being prepared for it.