Should You Freak Out?


The market was down over 5% in October. Eek!

You should be in full-on freak-out mode if one of the following situations describes you…

1. Your rent is due tomorrow and your rent payment comes out of your long-term portfolio

2. You are retiring tomorrow and your living expenses come out of your long-term portfolio

3. Your kids' tuition is due tomorrow and your tuition payment comes out of your long-term portfolio

If you are dumb enough to use your long-term portfolio as a checking account you pay short-term expenses from, then you should not get a wink of sleep.

If you are smart and keep your short-term cash needs set aside safely in cash or bonds, then October was NBD - for you non-millennials, that means "No Big Deal". (I married one, so I can say that.)

Your money should be matched with its "purpose".

Long-term money is long-term, so who cares about a 5% down month?

And short-term money is safely set aside, so a 5% down month doesn't even affect it.

Should you freak out about October? Nah. If you're doing things right, it was NBD.

DISCLAIMER:  This publication is for educational purposes only and should not be considered financial, tax or legal advice.  These statements have been simplified for illustration purposes.  Consult your financial planner or tax advisor for help with your specific situation.