It's been six glorious bull market years since the last correction. It's been a nice ride.
When will it come to an end?
There are probably plenty of reasons to start preparing for trouble. Far be it for me to tell you to not be a doomsday prepper. Between the Federal Reserve, China and bonds, what's a poor investor to do?
First you can tweak your portfolio to be more conservative. If you are starting to get a little squeamish about the next financial crisis, then contact your financial advisor right away. Move down a notch or so and make your portfolio a little more conservative.
Next you can keep some powder dry. Yep, you don't have to invest all your money. It's a common practice to keep cash on the sidelines for declines. These declines can represent some good opportunities to buy in a lower prices.
Take your winnings and leave the table. While I don't think this is the ideal solution, it could be a good idea to sell some winners. It never hurts to lock in some profits while things are good.
Change your self-managed portfolio to a pro. If you have been managing your own portfolio during these good times, but your worried you might get in your own way during a decline, then find a good financial advisor. Most financial advisors pay close attention to the level of risk inherent in your portfolio. This might just save you from a catastrophic loss.
Make sure you are diversified... No really, make sure. Have an analysis done on your portfolio. Make sure you have different asset classes and not just a bunch of investments that overlap and do the same thing. Make sure you have broad diversification all over the world.
It's been six years since a 10 percent or greater correction. No one knows when the next crisis is coming, but it never hurts to be prepared.