This financial storm is not unprecedented for the individual investor. Over the last 60 years, there have been a dozen or so bear markets, in which the stock market loses about 30% of it's value. These markets last for a year or so, and then stabilize.
So, if you have the right investment strategy, the experts say, you are going to be just fine. Certified financial adviser Bill Brooks is telling his clients to not panic. he says on a scale of 1 to 10, 10 being the worst, his clients' concern should be about a 1 or a two.
"Whenever is there is a crisis like this, it's a good time to say, 'are we prepared in the broader sense?'"Brooks says.
According to Brooks, a diversified portfolio is the key. He says you need to work with a professional to establish financial goals, and set a course to achieve them.
Some Questions to ask your Adviser:
-Are you saving enough?
-Are you on pace for retirement?
-Are risks being managed? What about life insurance, disability, long-term care, even an estate plan?
The one thing Brooks says you should not do right now, is freak out.
"If this market has you seized up in terms of you're so panicked and so afraid.. well, maybe you weren't in the best allocation to begin with," Brooks says.
Some people are moving their money out of the stock market and into gold or bonds. Brooks advises against making hasty moves right now.
"Investment decisions shouldn't be made on fear or greed."
All investments, he says, have risks. and there may be tax implications in moving your money around that could make it more expensive in the long run.
Again, experts say a diversified portfolio is your best defense against financial storms like the one that we're in.
How much should you be saving?
If you're 40 or younger, it's tough to predict how much money you might need
when retirement is decades away. A few key calculations, however, can help you
make sure your savings plan is on track.
Saving Depends on Life Stage
Rebecca Pace, a Cincinnati-based financial planner and CPA, recommends
putting aside at least 10 percent of your income when you're in your 20s and 30s
-- and even more if you're single. "I wouldn't expect they could continue to add
a lot to it while they're raising a family, but if they've put something aside
early, it should continue to work for them until they can save again," she
Weathering the Financial Storm
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