How to navigate market volatility, buying a home: Wealth!

On today's episode of Wealth!, Host Brad Smith breaks down key personal finance stories, from navigating market volatility to buying a home.

The major US indexes (^GSPC, ^DJI, ^IXIC) are recovering from a major sell-off, with the Dow Jones Industrial Average closing down more than 1,000 points on Monday. Gradient Investments senior portfolio manager Jeremy Bryan encourages traders to understand their level of risk and their overall financial goals as they navigate the market movement. "When you see big rallies like we've seen over the past six, eight, nine months, a lot of people can get away from what their natural investment plan is and start to chase returns because everything looks like it's going up," he explains.

Amid an ongoing market downturn, many individuals may be prone to emotional investing. Michael Liersch, Wells Fargo head of advice and planning, notes that market downturns can lead to "doom-scrolling," or individuals constantly checking their accounts. This behavior typically results in three main reactions: risk aversion, where people feel the need to eliminate uncertainty; action bias, which creates an urge to de-risk; and "herd-following," where one person's actions quickly lead to a "global phenomenon" of others following suit.

Almost one in five house hunters are willing to put their physical safety at risk in order to afford a home, in addition to other sacrifices such as quality schools, according to data from Redfin. Redfin chief economist Daryl Fairweather notes that potential homebuyers are willing to make sacrifices because "they're going to get whatever they can afford...It's been really difficult to break into the housing market because there's such low inventory. So home buyers overall are just having to figure out what can they get that's within their budget, given what's available on the market."

Finally, Maconomics founder and Yahoo Finance contributor Ross Mac gives some insight into the best ways parents can teach financial literacy to their children and pass the skill down to future generations. Financial literacy is becoming increasingly imperative for building and maintaining wealth as Millennials are set to inherit upwards of $84 trillion in the next several decades as part of the Great Wealth Transfer. Mac believes a great way to teach kids about financial literacy is to just have a conversation with them in a language they may understand.

This post was written by Melanie Riehl