Today a news story on television featured people who were rushing to buy safes and keep their money at home (some of them stashing it under the mattress). Yes: things are topsy-turvy. But that’s no reason to do anything that might erode your long-term financial positions.
Here are five more steps to take… away from the ledge.
1 - Do not sell off all your holdings. First, you’ll likely be selling assets at a low price point and likely lose money. Second, if you have more than seven years until retirement you have time to let the market correct. Removing and then replacing your money in and out of the stock market will almost assure that you miss out on long-term gains as you chase shorter-term gains.
2 - Consider investing more. Hopefully you already have a regular investing schedule so that you can benefit from dollar-cost averaging. If you have extra money in your budget consider “stocking up” now… everything is “on sale”!
3 - If you must reduce, do it wisely. If you’re feeling the pinch make some informed decisions on where to reduce your spending. Some possibilities: reduce the amount you dining out; use your car less; cancel unnecessary services and subscriptions;… and if it still hurts, knock just a percentage or two off your regular retirement investments as a last resort.
4 - If you must act, do it with prudence. If you really can’t sleep at night watching your investment values plunge, take a look at what you can control. Selling (some of) your portfolio may make you feel like you have more control. Just don’t make any quick or drastic decisions.
5 - Keep vigil. You’ll feel better the more you read and strive to understand what is happening in the market right now. This will make you better informed and give you wisdom for the next bend in the road.
Don’t panic — prepare! Make sure you know how your money is flowing by taking control of it with budgets and planning. Use Geezeo to help you.
Related:
Five Personal Finance Moves to Make Today
How Shocking Financial News Affects Our Politics
Excellent Resources for Understanding the Current Wall Street Conditions
How the Markets Really Work (video)
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