Are You Prepared for a Market Correction?

There's never a bad time to ensure you have a storm management plan for your portfolio

John F. Wasik 29 September, 2014 | 8:00AM
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When a bull market is roaring, preparing your portfolio for a correction or bear market might seem like closing the storm shutters on a sunny day.

But there's never a bad time to batten down the hatches for rough weather—or at least ensure that you have a storm management plan for your portfolio for whenever the market takes a turn for the worst.

I surveyed some financial planners to find out what they are doing to prepare their clients for blustery markets. Although you don't need a financial adviser to do any of this, you will want to take a page from their book by building in some protection and sticking to an investment policy statement that lays out your goals, expected rate of return and risk tolerance.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

John F. Wasik  John F. Wasik is a Morningstar columnist and author of 13 books, including The Audacity of Help: Obama's Economic Plan and the Remaking of America (www.audacityofhelp.net).