Stock Market Volatility is Back

Is a Crash coming?   Maybe, Maybe, Maybe

Lots of pundit are forecasting a coming crash.  Ray Dalio, Jamie Dimon, and Andrew Sorkin are among them.

However, when will the crash come?   No one knows.

So, it's best to be prepared and ready.

What am I doing?

• Have an emergency fund of a 1-3 years or more.
• Not taking on any additional debt.
• Ensure the certainty of current income streams: wages, interest/dividends, rental.
• Have cash ready to invest in a market index for a big drop.
• Staying invested and not selling.

Why?

• Emergency fund  and income stream will covers expenses if needed.
• Since 1950, every decline of 10% or more has beat the previous high on recovery.
• Bear markets last 11-14 months.
• Average time to reach previous peaks is 2.5 years.
• Investing is a long game.  

Most of all, I will try to stay calm and not panic, which is hard to do in the moment of a crash.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

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