Develop Risk Tolerance. A lot of people consider volatility a risk. I don't think that is true. Although I'm a strong believer in mark-to-market accounting, which can be a real hay-ride, I don't consider volatility to be a risk. A true risk is something like naked call writing or using LTCM-sized leverage. Leveraged ETFs are not the same as the widely accepted leverage of buying a $1M house with only $30k down. True risk is retirement-threatening underperformance for the sake of reduced volatility. Volatility is relative; there is no universal definition of 'high volatility'.