Is the Stock Market Going to Crash Again? | Personal Finance

It’s wise, then, to make sure you have at least six months’ worth of savings in an emergency fund. This way, if you lose your job or face an unexpected expense, you can leave your investments alone until the market recovers and prices bound back.

2. Allocate your investments properly

Next, double-check that your portfolio is allocated appropriately for your age. If you’re closing in on retirement, your portfolio should be more conservative than that of someone just starting their career. When you’re investing more heavily in bonds and other conservative investments, a market crash is less likely to wreck your retirement plans.

That said, it’s still wise to invest at least a portion of your portfolio in stocks to help your money grow faster. A common rule of thumb is to subtract your age from 110, and the result is the percentage of your portfolio that should be allocated to stocks.

3. Choose the right investments

One of the most critical components of surviving a market downturn is choosing the right investments. Healthy companies are more likely to pull through periods of volatility, while unstable stocks may crash and never recover.

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