2 things I do to prepare for another 2020 stock market crash

2 things I do to prepare for another 2020 stock market crash

No one wants to think about stock crashes in 2020 Back in March, But the reality is that we do not know what pandemic stores. If cases are rising, or if there is bad news Vaccine front, May react negatively to stocks.

As someone who has been investing throughout this ordeal, I am concerned about another market crash – but I am preparing for one. Here’s how.

1. I am increasing my recent cash reserves

We are a Recession. That means outside the job security window. Likewise, I give a point to save more money so that if my workload is reduced, I can get cash reserves to tap when paying my bills.

Image Source: Getty Images.

I spend a little during the COVID-19 pandemic. I refill my car once or twice a week instead of once or twice a month, I don’t go out to eat as often as usual, and the only vacation I plan on is camping trips. . My plan is to take some of that unused money and put it in the bank. If I need money to pay the bills, it will be there and I will not have to touch my investment portfolio to access the money if my income decreases.

In market tanks, I increase my cash heap to get discounts on quality stocks. It was a tactic I used during the months of March and April and it allowed me to buy a few shares on my personal watch list, which had previously been valuable to my liking.

2. I delve deeper into my investment portfolio

Since we do not know what the rest of the year is for the stock market, I check my portfolio and make sure I like what I see. In particular, I look at two main areas:

  • Diversity: A Wide stocks It’s always important, but especially during a recession. I try to make sure I don’t over-invest in a single market segment.
  • The investment is lost: Some companies perform better from time to time. I carefully monitor the minors in my portfolio because I may try to sell them at a loss. That way, I can buy the best potential stocks if I have the values ​​of a nosy with free money. Also, taking a loss can help me out of an ail Tax perspective.
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Frankly, I often evaluate my portfolio anyway, but since a stock market crash is on my radar, I will pay more attention this time.

Expect the best, but be prepared for the worst

I can not predict what will happen to the rest of the stock market in 2020. That’s why I’m willing to sink some time and effort into getting ready.

Do I want to take a two-week break to cook and order every night? of course. I know that saving more money now will help me better if the market is in worse shape. While it is easy to assume that my portfolio is in solid shape, spending time on it will set me up for another recession.

Of course, I expect the stock market year to end strongly; 2020 owes us at least that much. But I also want to be prepared if adverse effects occur.

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