Should You Prepare For The Next Market Crash?

Yes. We should all always prepare for a severe market turndown. To be prepared is to be forewarned. Forewarned is forearmed. Preparation prevents piss poor performance.

A downturn is inevitable. We know the market behaves cyclically, and corrections are part of the circle.

That being said, we have no idea when it’s going to occur. It’s like the sword of Damocles hanging over our collective heads. If we prepare, take it as inevitable, and don’t freak out and sell when it happens, we can weather the storm.

It’s like a rainstorm. When it occurs, we put on our inclement weather gear and go about our business.

Our investment inclement weather gear is: not investing money in the market that we will need soon, researching the companies and funds we invest in, and not selling when things go south.

It’s how stoic philosophy prepares us for the unanticipated, so we don’t feel ambushed. We know we will experience problems and disappointments. We just don’t know what and when. So we prepare as good stoics, and when they happen, we calmly acknowledge them and recognize that this is one of those things to which we have acclimated ourselves. A market crash is no different.

What goes down, comes up again. The stock market operates on an inversion of Newton’s law of gravity. Benefitting from it is a matter of discipline and patience. And growing a pair.

Before investing, have a safety fund set aside, pay off your credit card and consumer debt, and start a side hustle. De-risk your life and spending.

With all that being said, there is no way of knowing when a market crash or downturn will occur.

There are a lot of pundits that will sound the alarm. They will have an analytic thesis about why now is the time to get out of the market. One or some of them will be right. A broken clock is right twice a day (unless it’s European time, then once a day.)

These prognosticators have a vested interest in being chicken little. The right one will get high visibility for the next cycle as an authoritative voice. “Tonight we have with us so-and-so, who predicted the 2008 crash, or the dot-com bubble burst.” The publicity helps them sell merch or…

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