ARE you and your
finances ready for the
stock market crash?

The market is going to
crash, just as it has in the past.
It might be about to crash as |
write this column. Or the
“correction” could be months,
even years, away,

Don’t try to predict when

aot AV

north shore news

& BUSINESS

the market will fall, how much
prices will drop or how long
the slump will last. Instead,
make sure your investments
are arranged to survive and
even profit from the crash.
(fhe same applies if vou invest
in real estate, or a business. }

Then when the crash
comes, shrug vour shoulders
and get on with your life.

Let’s sav you want $10,000
in three years toward buving a
house, or to pay down your
mortgage or other debt. Put
that $10,000 into a guaran-
teed three-vear instrument so
you know the money will be
available. If the stock market
does better than the three-year
rate vou earn, look on this lost
growth as the cost of insur-
ance against loss if the market
is lower three years from now.

Perhaps you plan to rake
time off work, or want to be
prepared in case you lose your
job. Perhaps vou hope to
retire and will need the
income trom at least some of
vour investments. Consider
shifting cnough capital into
instruments that earn reason-
ably guaranteed income like
GICs, bonds or possibly some
dividend stocks, or murua!
funds that hold such instru-

Wednesday, July 1, 1994 ~

ments.

With real estate, arrange
your leases so they don’t all
come up in the same year.
With business investments,
spread your moncy over differ-
ent areas so a downturn in the
retail sector, for example,
affects only part of vour hold-
ings.

With stock market, real
estate and business investment,
have enough liquid hoidings
whose values are unaffeceea by
the market so you can draw on
these. Don’t let a need for
cash force you to sell your
other investments at fire-sale
prices.

Of course, a falling market
can offer you a chance to
invest when others self at those
“bargain” prices. [fvou don’t
want to keep a cash reserve,
set up lines of credit or other
borrowing arrangements.

02303 Flat Latex or 12220 Flat Alkyd ~ Exterior

North Shore News — 17

roof your stocks against market crash

H you are building up
investments and have never
experienced a slump, crash-
proof your portfolio with the
above guidelines and a written
plan. Then you won't panic
and bail out of the market at
precisely the wrong time.

If you have a financial
adviser — hopefully one who
has experienced a crash —
develop this plan with his or
her help.

_ Copyright 1998 Mike
Grenby

Mike Grenby is a columnist
and inde; i pie persenal
Financial adviser; he'll answer
questions in this column as
Space allows but cannot reply
personally — contact him at
P.O. Box 50029, South Slope
R.P.O,, Burnaby, B.C. V5
5G3; e-mail mike@grenby.com
and see previous columns at
Mike's website: wwwgrenby.com

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