Ep 31: How Should You Prepare for the Next Market Crash?

Last episode we talked about market crashes and what they are. Today we’re sharing how you can prepare yourself for possible market crashes.
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Show Notes For This Episode

On this episode of Saving the American Dream, we’re talking about how to prepare yourself for a possible market crash.

To prepare yourself for the next crash, you have two options – you can become a psychic and avoid the crash entirely (kidding!) or mentally prepare by understanding your own human behavior and how to manage that.

You need to understand the risk you’re taking in your portfolio and you can understand your potential upside or downside in any given year. Stress-test your portfolio and understand how you’ll react if it goes down.

Ask yourself how you’d feel if your money dropped by certain amounts. If it’s too much for you emotionally or financially, we need to reduce the number of stocks you have and add more bonds, for example.

The emotions of the downturns are more impactful than the emotions of the upturns. But for some people, it hits them harder when assets go up because they feel like they’re missing out.

Part of living in this world is that things go wrong sometimes and downturns happen. When you work with a good financial advisor, they can help you prepare for downturns and get through them with greater ease.

Listen to the full podcast or use the timestamps below to jump to a specific section.

Navigating the Show

[1:58] How to prepare

[4:41] Emotions

[6:59] Handling market corrections

[9:10] Downturns happen

[10:45] Help from your advisor

[11:50 ] Crashes can create opportunities

[13:47] When’s the next crash?


Stress test your portfolio and understand how you’ll react if it goes down.

– Michael Schulte

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