Emergency Fund, Financial Planning, Investing, Stock Market
January 10, 2019
The stock markets delivered a lump of coal at the end of 2018. December was one of the worst months for investors in years, and when you take a glance at your year-end statements, you will likely see double-digit losses for many of your stock fund and ETF investments.
If you’re unsettled by what is going on, that just confirms you’re human. It is unsettling! But reacting emotionally by abandoning your long-term investing strategy would be a costly mistake.
Please, take a deep breath, and follow my advice on how to handle a rocky stock market.
An emergency savings fund is how your family can weather a layoff, or reduced hours, if we do head into an economic slowdown. There is no more important investment right now than building up your emergency savings. I encourage you to search for “high-yield savings accounts” online. Many online banks now pay 2% or more for savings accounts that you can link to your checking account. If your savings account is at an old-school bank you’re probably still being paid nothing. Now is the time to move your savings and focus on adding to it. If you have eight months of living expenses saved up, you are going to be in solid shape to deal with any setbacks a recession might deliver.
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