Today’s ever unstable financial environment there is always the risk of another big stock market crash. In order to protect your money the best advice anyone can give you is to plan ahead and be ready, just in case. Here are some great tips that you can use to help plan, prepare and survive a stock market crash.
Diversify
when it comes to your investment strategy make sure that you don’t put all of your money in one place. In order to survive a stock market crash your best bet is to diversify your investments, making a sound portfolio. You may want to consider some higher and some lower risk investments like a combination of stocks and bonds, for example. Additionally, you may want to consider other investments like fixed annuities, gold, real estate and even CD’s and money market accounts.
Know Where Your Money Is
When you invest, in order to protect your assets, you should always know where you money is. In today’s financial climate you will want to know what companies you have invested in and make sure you feel confident in your choices. This may mean doing some serious research including looking at the company’s financial reports and more. Additionally, after you have made the decision to invest in a certain company’s stocks you will want to stay abreast of any company changes.
Get Prepared Now
In reality a stock market crash can happen on any given day and the more prepared you are to handle it, the more likely you are to survive it. The best thing you can do is to get your finances in good order so that if you were to take a hit, you would still be ok financially. In order to do this you should highly consider paying off as many of your current debts as possible. This might include credit card debt, car loans and yes even your home mortgage. Additionally, you may want to consider an emergency fund that would cover all of your expenses for 3-6 months. You would want this money to be in a no risk account and easily accessible.
Know There Is Always A Risk
What many people fail to remember is that investing in the stock market is risky and when you make an investment you are taking a gamble. In reality, even though highly unlikely, you could wake up one day with all of your investments in the market gone. Before entering the market, make sure you are prepared to handle the risk.
If The Market Crashes Don’t Panic
Finally, if you do find yourself a victim of a stock market crash don’t panic. One of the worst things you can do is to sell out, as you will most likely lose a great deal of money by doing so. History shows that the stock market will recover and you will need to stay calm and in control. If you have followed the above advice you will be prepared and ready to weather the storm.