This is an updated version of a story that previously ran on April 28th.
No one’s finances are immune. But there are ways to guard against losses and make the most of what you have.
“If you are not working, or are looking for a better position, now would be a good time to take advantage of the very strong job market and lock in a position,” said Florida-based certified financial planner Mari Adam.
To help in your search, here are some resume dos and don’ts to keep in mind.
Cash in on the housing boom
If you’ve been on the fence about selling your home, now might be the time to make the leap.The housing market has been on a tear, with year-over-year home prices up nearly 15% in April and rents nearly 17% higher.Meanwhile, mortgage rates are up more than 2 percentage points from a year ago, which makes buying a home much more expensive and that may dampen demand. “I would suggest that anyone planning to put their house on the market do so right away,” said Adam.
Cover your near-term cash needs
Having liquid assets to cover you in emergencies or severe market downturns is always a good idea. But it’s especially crucial when facing big events beyond your control — including layoffs, which typically increase during recessions.
That means having enough money set aside in cash, money market funds or short-term fixed income instruments to cover several months of living expenses, emergencies or any big, anticipated expense (e.g., a down payment or college tuition).
This is also advisable if you are near or in retirement. In that case, you may want to set aside a year or more of living expenses that you would ordinarily pay for with withdrawals from your portfolio, said Rob Williams, managing director of financial planning, retirement income and wealth management at Charles Schwab. This should be the amount you would need to supplement your fixed income payments, such as Social Security or a private pension.
In addition, Williams suggests having two to four years in lower volatility investments like a short-term bond fund.
That will help you ride out any market downturns should one occur and give your investments time to recover.
Don’t trade on the headlines
Rapid-fire news reports about higher energy and food prices or talk of a potential world war or nuclear attack are unnerving. But making financial decisions based on an emotional response to current events is often a losing proposition.
“Making a radical change in the midst of all this uncertainty is usually a decision that [you’ll] regret,” said Don Bennyhoff, …….