According to a September 10th report from ETF Daily News, professional investors are preparing for a stock market crash. David Zeiler states, “It looks like a growing number of professional investors are preparing for a stock market crash, as hedge fund filings for the second quarter show a spike in defensive positions. n particular, legendary billionaire George Soros made a huge bet against the market. He increased his short position on the Standard & Poor’s 500 by a startling 605%. The 9.69 million new shares of SPDR S&P 500 ETF Trust (NYSE Arca: SPY) put options gave Soros a total of 11.29 million shares and made it the biggest holding in his portfolio.” Zeiler goes on to explain, “Soros also added significantly to several gold positions, a ‘safe haven’ move that’s typically made when investors suspect a stock market crash is on the horizon.” According to the report, Soros is not by far the only professional investor which is making such moves. So if a stock market crash could be on the way, how do you prepare? Here are a few ideas to help keep your money safe in the event of a market crash.
1- Become as Debt-free as Possible. In the event of a stock market crash, those investors who were smart enough to become debt-free are the ones who are more likely to come out with minimal damage to their finances. Pay off those credit cards, catch up on mortgage payments, even pay a few payments ahead if possible.
2- Stock Up on Needed Items. We aren’t saying that you should become a doomsday prepper, but stocking up on things that may become even more expensive is always a good idea if a stock market crash is looming.
3- Sell Your Real Estate. Remember the real estate slump of the late 90s? This one could be far worse. It is a good idea to sell now, and/or do not purchase real estate until the crash is over.
4- Store Up Cash. In case banks or credit companies start to panic and limit withdrawals, it is good idea to have plenty of cash on hand.
5- Invest in Gold and Silver – One of the better things to buy before a stock market crash is gold and silver bullion as well as silver and gold coins.
6- Sell Off Vulnerable Stocks –If you on stock which you know is vulnerable to a crash, sell it early. The longer you wait to sell, the less your stock will be worth. Waiting too long could leave you stuck in the negative.
7- Understand the Process of a Crash. It is important that you understand the process of a stock market crash so that you can see what stage of the crash you are at. First, the stock market will fall to 50% or less. At this very first but critical stage, many investors will become completely broken. Next, the banks will begin to fail. Then liquidity crises will start to occur. Once this has passed, the dollar will lose its value.
Many of these are, of course, worse-case scenarios for a stock market crash, but they are all possible. It is very important to be prepared and watch for the signs of an impending crash. Be prepared and your ship will sail through the stormy waters to come out on the other side unscathed.