The market can be a fickle creature. Even the recent pandemic produced some incredibly unexpected and even unprecedented events. With the increasing trend towards more highly volatile markets, many people are wondering how they can protect their personal finances no matter what the market is doing.
We’re going to look at a few things that you can do to make sure you are prepared for any eventuality. No matter which way the market is going to eventually move, you’ll have some tips that can help you protect your finances and wealth in the event of a market downturn.
Don’t Become Trapped In Debt
The market will go South at some point, and things could become grim. It happens, and those who shoulder the lightest burden of debt are often able to weather the storm a bit easier.
With this in mind, try to get ahead of the game by paying down your debt. Look at the methods of debt snowball vs debt avalanche and see if one might be the key to beginning to lighten your debt burden so you can protect your assets.
Safeguard Your Investments
Diversification is the key to longevity in nearly any investment portfolio according to this Motley Fool review. Not just mixing it up between a few different stocks, but really mixing it up. Talk to your financial planner about making sure you are invested across various major sectors, as well as leveraging investment in stocks with other investment avenues.
It’s a good idea to have a little of everything from hard assets, including cash, to bonds, real estate, and commercial investments. This will ensure that no matter what the market is doing, your portfolio is maintaining good health.
The leader in cryptocurrency, Bitcoin, as well as Etherium, is becoming a viable long-term store of value. There are also large-scale country-wide adoptions of cryptocurrency in progress, so investing in crypto could be a great way to detach your portfolio from some of the market volatility that comes with fiat currencies.
Be Aware Of Scams
In times of hardship or crisis, scammers come out to try to get a slice. This will be the case as long as there are people that can be tricked into giving out the perfect bit of information.
Don’t give out any information to anyone that isn’t your particular banker or broker. Don’t click links in texts or emails that you didn’t ask for. Don’t give out your social security number, driver’s license number, or any other personal or confidential information.
Use strong passwords that are unique to each account, and enable two-factor authentication whenever possible. Finally, be sure you check all of your accounts for unauthorized activity weekly, if not every few days.
Don’t Sweat Over Paper Losses
The market moves. It runs, then it corrects. That’s just what it does, and while that is part of its beauty, it is also part of the terror. Sometimes we don’t ever think the corrections are going to end, but they do. Until you decide to fully cash out and liquidate, don’t sweat it. It’s not a real loss if it’s still on paper.