Finance Get rid of high-interest debt – still paying down your credit cards? Have a balance on your home equity line of credit? Haven’t paid off the car yet? Getting those things paid off (or at least well under control) should be your number-one financial priority in bear markets, bull markets or anything in-between. Control the mortgage – can you pay off the mortgage? Great – do it. If you’re still working on it, make sure that what remains is down to a reasonable size, so that if interest rates go up by a few more percentage points (as they may well do), you won’t lose any sleep. Emergency fund – do you have a “just in case” stash of easily accessible cash? If not, make it a priority to build one. The exact size of such a stash will vary according to your comfort level, but everyone should aim to have at least enough to deal with a roof that starts leaking, a car transmission that starts making funny noises or a washing machine that goes to the great appliance centre in the sky. “Bucket list” spending – got a grandkid who needs help with tuition? Planning a once-in-a-lifetime African safari? Have your eye on your dream car or dream cottage? Determine a price tag for these items and put the money aside in an ultra-secure savings account, GIC or similar investment – you don’t want a stock market downturn to stop you from crossing items off of life’s to-do list. Insurance – have you protected your assets (home insurance), your health (critical illness insurance) and your earnings power (life insurance)? If you’re fortunate enough to have a substantial portfolio, a house that’s paid off and very little debt, perhaps you don’t need such protection. But if you do, make sure that it’s in place before you go shopping for bear market opportunities. Estate plan – is your will up to date? Does it fairly reflect your current life situation regarding spouses, life partners, children, grandchildren and other friends and family? If not, seek out a legal professional (no, a do-it-yourself will kit doesn’t count) and get it done. None of these to-dos could ever be considered groundbreaking financial advice. And they’re certainly not the things that give you “bragging rights” at a cocktail party. But taking care of them remains the most significant, most important step which you can take during challenging times – easy, practical steps that can make a dramatic, lasting impact on your financial future…no matter what the market may be doing. Get your financial house in order The first step to surviving and thriving in any bear market is to have a clean “financial house.” Taking care of the foundations of personal finance is good advice in any economic environment, but it’s doubly good advice in difficult times such as bear markets. If any of the following topics require your attention, it’s probably best to focus on these before you turn your mind to the stock market: CSANews | WINTER 2022 | 39
RkJQdWJsaXNoZXIy MzMzNzMx