Planners advocate prudence - and a cash cushion - to get you through volatile times.
By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: March 18, 2008: 5:01 PM EDT
NEW YORK (CNNMoney.com) -- The phrase "run on the bank" is really something you never want to hear. Yet that's what best describes Bear Stearns' swift demise - and it has caused investors to wonder if such a run could happen elsewhere.
From the average person's perspective, it's a little hard to know how worried, if at all, to be about your money right now.
While certified financial planners are concerned about the financial news coming out of Wall Street these days, they are far from running scared on behalf of their clients. In fact, they're still encouraging them to stay invested in a well-allocated portfolio.
But they do see value in taking certain prudent measures - many of which make solid sense even when the financial markets aren't as rocky as they are now.
Consider the money you've got in the bank. The Federal Deposit Insurance Corp. will insure your money in checking, savings, certificates of deposit and money market deposit accounts up to $100,000. That's per depositor, per institution. In some instances, you may qualify for more coverage, but generally speaking $100,000 is the cut-off for deposit accounts.
So if you have more than $100,000 combined in all your accounts at one bank, you might consider moving some of it to another institution. "That's a good general rule of thumb," said Jim Whiddon of JWA Financial Group in Dallas.
Link: http://money.cnn.com/2008/03/18/pf/bear_stearns_fallout/?postversion=2008031817
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