#1 of 7 Ways to Prepare for a Market Pullback (Before it Happens)
contributed by Jeff Dobyns
Every investor knows that the market can sometimes feel like a roller coaster ride. For the most part, in recent years we’ve been either essentially flat or the market has been up… though we have had a relatively steady climb with some severe but short pullbacks. History suggests that we will have market declines periodically. While there are plenty of markers we’re tracking to prepare our clients for volatility, there are things you should be doing, too.
I’ve put together a series of 7 suggestions for preparing BEFORE the correction (rather than reacting afterwards). In this first installment, I’m talking about your emergency fund. How much should you have available in your checking and savings accounts? Here’s my take:
So how much is the right amount to have in the bank? My suggestion is to never drop your liquid savings below the number that you feel comfortable with. Every client is different, but more is generally better. Having a large amount of cash enables people to be more confident and to handle market volatility with less stress.
The information has been obtained grom sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Jeff Dobyns and not necessarily those of Raymond James. Investing involves risk and investors may incur a profit or loss. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making an investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.