One minute, all economic indicators are sitting pretty and the Dow Jones industrial average is hitting record highs. The next — blammo — we’re in the throes of a stock market “sell-off,” or “right-sizing,” or whatever you want to call it. (Semantics is probably the last thing on anyone’s mind when you’re watching chunks of your 401(k) and IRA evaporate.)
Just as it did recently, the stock market is going to decline again. But no one has the luxury of getting a calendar notice announcing the time and magnitude of a seismic stock market event. Still, just knowing that these things happen means you can create in advance a game plan for what to do while you’re in the thick of it.