You wouldn’t believe how many times I’ve heard people say the words, “If I only had a crystal ball.” The phrase probably peaked in popularity when the stock market fell in the early 2000s – then rallied (eventually) – fell again in 2007-2008, and rallied (yet again).

 

Here at the office, I have crystal balls in my four meeting rooms. I enjoy the reactions I get when prospective clients see them and read the signs I’ve posted under each. Do you know what the signs say?

 

“Crystal Ball Broken; Planning Required!”

Can a financial adviser make a prediction without a working crystal ball? Yes. Ready? I’ll offer one here: A bear market is coming. Do I know how much the market’s going to fall? Nope. Do I know when it’s going to happen? Nope. But it will happen! Bull markets don’t go on forever.

 

No one can tell the future; I can’t. Neither can the financial adviser down the road nor the one whose office is on Wall Street. (Oh, and by the way, neither can the pundits on the financial news channels!) The best strategy is to hope for the best and plan for the worst. And, if you do plan for the worst, I think you’ll be glad you did.

 

So, how do you do that? My recommendation would be to sit down with an experienced financial adviser. Go over your current investments. Get his/her opinion on what you have. A good adviser will take the time to: 1. Listen; 2. Analyze your current holdings to make sure you don’t have too much of any one stock or aren’t too heavily invested in any one sector of the market; 3. Make certain that you have enough set aside in cash for emergency situations; 4. Recommend other options to you, like bonds, mutual funds, annuities, long-term care insurance, a reverse mortgage loan or reverse mortgage line of credit. Remember, these suggestions should be based on, and tailored to, your personal situation. It will be up to you to make the final decision as to whether any of these services or products are right for you. Having a well-diversified portfolio, and a variety of sources of income available to you, could help ease the pain of any future stock market drops. You might even decide that a crystal ball isn’t really needed after all!