Four steps investors can take to prepare for the next market downturn

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Four steps investors can take to prepare for the next market downturn GlobeInvestor

With stocks hitting new record highs and the bull market nearly a decade old, it may seem like an odd time to think about the next downturn.The S&P 500 is up more than 380 per cent, including reinvested dividends, since the depths of the financial crisis in March of 2009. The Dow Jones Industrial Average topped 27,000 recently. Despite some warnings of an economic slowdown ahead, investors are pushing stocks higher.It's important not to get complacent, though.

That's why having a firm understanding about your process and strategy, and reviewing it before the chaos sets in, will go a long way to ensuring that you don't make the same mistake. The second step investors can take is to set goals. This gives them something to focus on other than the daily market fluctuations. A long-term investment plan helps an investor put risk limits on the money invested for the short term while reaching for more yield on money invested that won’t be needed for many years.

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