A Little Late…
Markets go up. Markets go down. We know this, and yet when it happens, people still run around in shock saying, “How could this happen?”
Here’s the deal: we need to prepare for a “crisis” before they happen. This of it like running a fire drill for your investments. Your goal is to have a financial plan that can accommodate both good and bad market days. Part of this plan needs to include an honest discussion about how much risk you can tolerate.
If the market is steadily increasing day by day, you probably feel pretty cool and collected, so why not dump the bulk of your portfolio into stocks? The reality is that you need to asses how you’ll feel on a day when the market decides to do a belly flop. Can you avoid overreacting?
The reality is that no one knows when the market is going to take off or when it will drop off the edge. The only thing we can control is ourselves, and the easiest way to do that is planning now for the crisis that’s sure to come.