At a time when the stock market is plummeting, one expert imparts his advice for dealing the turbulence.
“Just trust the long-run process when it comes to your investment and your portfolio,” Anthony ONeal, author of “Debt Free Degree,” said on Yahoo Finance’s YFi PM. “I’ve lost some money — and that’s OK.”
ONeal recommends still sitting down with a financial expert but making sure not to pull any instant plugs on your investments.
“When we bounce back, we can come back very strong,” ONeal said. “Sit down with a [financial expert], but just make sure you have yourself in the right place.”
Don’t make debt worse
And for those who are considering taking advantage of the markdowns on stocks, ONeal says not so fast. He says only those without debt should consider investing.
“I want you to get out of debt before you even invest. OK?,” he said. “I don’t want you investing into a 401(k), stocks, or anything if you have debt.”
ONeal’s advice comes at a time where almost three in ten Americans have no emergency fund, according to a recent survey by personal finance site BankRate.com. And among those that do, a quarter attest to having enough for less than three months.
What should you do instead?
He says you should follow a three step method: First securing a $1000 for an initial emergency fund, then reducing your debt using the snowball method of tackling the smallest the first, and then adding another 3 to 6 months of funds in your emergency account for expenses.
“So like right now, if you were one of the temporary employees who were not getting called back in because of the coronavirus, at least you have 3 to 6 months to live if you have the solid foundation,” ONeal said.