You Should Panic, Prudently
When there are rocky times in the market, or in your life, panic is a natural emotional reaction and you shouldn’t run from it.
Throughout life there are situations where you need to make tough decisions. One of those examples is during an economic downturn; part of a natural market cycle.
There are ways to panic that don’t disrupt your long-term goals. Here are a few ways you can put yourself in a position to minimize disruption during a downturn:
Don’t let your emotions get too involved, it’s OK to ask for help.
Try to limit the amount of reactive behavior and put yourself in a proactive position by thinking a few steps ahead.
Determine the minimum amount you need to get by every month. Trim all unnecessary expenses, plan to live on that for a few months longer than you are initially thinking.
List assets based on tax ramifications, if you have to dip into savings do it where you aren’t going to also pay a hefty tax.
Give yourself a big runway. If you are thinking the tough times will last 4 months, make sure you have enough cash to cover 8 months. Allow yourself time to make the right decisions, not rash decisions.
Definitely don’t ignore or abandon your plan. Instead of looking at everything as a crisis, focus on what you can control and create a plan to get life back on track.
We welcome questions about your finances and how they affect your present and future. Ask us whatever, whenever.
Of course, being in the financial industry we have to let you know that this communication is not constituted as financial advice. Investments are not insured by the FDIC or any other government entity. Investment and insurance products are subject to investment risk, including possible loss.