Is It Time to Prepare for a Bear?

After years of a bull market, a bear market and economic recession are bound to happen at some point, making now the perfect time to start preparing your finances, says Senior CFP Board Ambassador Jill Schlesinger, CFP®

With U.S. stocks in the second longest bull market and economic expansion on record, it is only a matter of time before the markets go into a bear market. Senior CFP Board Ambassador Jill Schlesinger, CFP®, said now is the time for consumers to prepare for a market that doesn’t always go up.

While hard to predict exactly when any recession will occur, it is best advised to manage finances with awareness that both a recession and a bear market are unavoidable. Schlesinger shares what you can do now to be better prepared when the market shifts:

• Revisit/Create Your Financial Plan: As flight attendants remind us, “items may have shifted during flight.” The same goes for your finances – hopefully for the better, but regardless, right after tax season is a good time to update the game plan.
• Maintain a Healthy Emergency Reserve Fund: For those still working, maintain six to 12 months of expenses (12 to 24 months for retirees) in a safe, liquid account.
• Pay Down Debt: There’s nothing like a recession and bear market to expose the dangers of carrying too much debt.
• Maintain a Diversified Portfolio: Don’t forget to rebalance by trading up assets to maintain your desired level of asset allocation.

Read Schlesinger’s full blog post here with more details.

For additional guidance, a CERTIFIED FINANCIAL PLANNER™ professional can help you develop/update a financial plan, share best practices for building an emergency fund and paying down debt, and assist in creating and managing a diversified investment portfolio.