The market was down over 5% in October. Eek!
You should be in full-on freak-out mode if one of the following situations describes you…
1. Your rent is due tomorrow and your rent payment comes out of your long-term portfolio
2. You are retiring tomorrow and your living expenses come out of your long-term portfolio
3. Your kids’ tuition is due tomorrow and your tuition payment comes out of your long-term portfolio
If you are dumb enough to use your long-term portfolio as a checking account you pay short-term expenses from, then you should not get a wink of sleep.
If you are smart and keep your short-term cash needs set aside safely in cash or bonds, then October was NBD – for you non-millennials, that means “No Big Deal”. (I married one, so I can say that.)
Your money should be matched with its “purpose”.
Long-term money is long-term, so who cares about a 5% down month?
And short-term money is safely set aside, so a 5% down month doesn’t even affect it.
Should you freak out about October? Nah. If you’re doing things right, it was NBD.
