If a Stock Market Crash Is Coming, History Says You'll Survive If You Make This Move (Hint: It Does Not Mean Going to Cash)
It is not about perfect timing, but about getting your portfolio through to the other side smoothly.
Overview
When your stock portfolio starts working, which has happened to many over the last few years, some investors begin to question whether a crash is near. You can't go broke taking a profit and moving to cash. At least, that's how the old saying goes.
What if the adage is completely misguided? If a crash is coming, the worst thing you can do is sell your stocks and hold cash. You'll be better prepared to survive through the gyrations of the stock market if you make this move instead.
Details
Going to cash -- especially with a huge portion of your portfolio -- can be very risky, even when the bull market looks extreme. Cash does not go up in value, and even if you park it in a money market fund, it will pay less in annual interest payments than long-term bonds. Plus, if you sell a huge chunk of your winning stocks, you will be required to pay taxes on capital gains.
Source
Originally published at www.fool.com.