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When the market declines, polarizing opinions surface on social media. Some people thinking they should sell and get out now, and some saying you should buy while “everything is on sale.”
Before you take to social media for investment advice, take a good look at your financial state and determine if investing is the right choice for you, no matter the market conditions.
You get the greatest tax and investment growth benefit from holding investments long-term, so make sure you are ready to commit.
1.) You should have enough liquid cash available in case of emergency. For some, this is 3-6 months of expenses. This is entirely up to you and your comfort level.
2.) You should pay down any debt that has a small balance (just get rid of it) and anything with high interest. You don’t want to let this grow.
3.) You want to find where you are leaking cash. Look at your monthly expenses, especially those on auto-pay, and tighten the faucet so you can use that money to add to your investment.
You need to make sure you are ready before taking on any sort of investment. If you don’t plan to actively participate in selecting your investments and engaging in trading, consider hiring a professional and starting out with index funds or ETFs.