As the markets struggle to recover from their recent drop, investors fear the worst may still be yet to come. Despite the fact that there has been an uptick with economic recovery prospects, some analysts are warning of a potential S&P 500 downside to 2200 or lower. This could be devastating to the markets, and investors are looking for ways to protect their assets in the event of such a drastic decline.
Most analysts agree that an S&P 500 downside of 2200 is a real possibility. And while a significant drop in the markets is never pleasant, there are some things investors can do to minimize their risk. The first is to diversify their investments and keep the majority of them in safer investments such as bonds and cash equivalents. Doing this will help limit the potential for a large drop in the markets.
Another potential strategy is to keep their cash portfolio liquid and be prepared to pull out of the market if the situation calls for it. Investors should make sure that they have access to their cash in the event of an emergency or if the markets take another dive.
Finally, investors should remain disciplined and stick to their long-term plans, even in the face of adversity. While it’s understandable to be concerned about a possible S&P down market, investors should not be swayed by panic and market volatility.
The notion of an S&P 500 downside to 2200 or lower is a scary prospect for all market participants. Fortunately, with the right strategies and smart preparation, investors can limit the damage and come out ahead in the end.