Think you need CASH?

During market corrections advisors get calls from clients requesting cash.  This is particularly when the market is having a bad day.  Sometimes it’s for a vacation, or making a large unplanned purchase, or simply deciding to pay off credit cards.  And then sometimes investors will unnecessarily turn “sour” on a long-term investment (during down markets) in order to fund a dream running through their mind.  Do you get the picture?

To preserve one’s portfolio and enhance chances of a solid recovery, we suggest that people not redeem from their investments unless it is absolutely necessary.  An investor’s portfolio should be their ‘serious’ money for long-term goals (retirement, new business, etc.)  If this is your situation, ask yourself “Can I delay this decision?” or “Can I put off this purchase or simply not spend this money?”  Also think through if you are making money by doing this, or possibly costing yourself something that you may not get back?   Many times, unnecessary purchases are difficult to recover from.

During times when you need cash, investors should first go to their checking or savings accounts.  ‘Emergency funds’ should have been established and funded for unexpected needs.  If you have not planned ahead then use this uncomfortable time to revise your plan (maybe through professional financial advice) so you may better handle needs going forward.  Don’t make a bad decision today that you will pay for years down the road.