Stock Market Crash 2008: Stop Panicking. Seriously. Stop.

Yes, things are looking serious.

No, the bailout plan isn’t some magic cure-all.

This is stuff we’ve seen coming for weeks now.

So now is not the time to start panicking.

Nor is it time to give in to fear-mongering. (I’m talking to you, CNN! Compare these two photos — thanks markzero — and see that far from being in a panic, the guy is just talking into his microphone: CNN cropped photo vs. Yahoo! full photo.)

Take a look at your investment portfolio and at your personal finances. Do what you can to get things in order.

Investment portfolio

Look at your allocation. Is it weighted somewhat conservative? Do you have a good mix? Index funds? Companies that are likely to survive? Try to avoid looking at your retirement account statement, and remind yourself that over the long haul, the stock market gains. Consider unloading only the especially vulnerable investments. If something still has solid fundamentals, stick with it.

Also, consider cash investments right now. You won’t get big returns, but many of them are guaranteed, including a recent guaranty for money market funds and also an increase in protection for FDIC-insured accounts. They can present a reasonable way to get some return for those who have a lower risk tolerance and are especially concerned about riskier investments.

Personal finances

It’s back to basics here:

• Try to reduce your debt as much as possible.
• Redo your budget and cut out the non-essentials to ensure that you spend less than you earn.
• Look for true bargains.
• Try to find ways to earn a little more money to pad the emergency fund.

Chances are, you are not going to see an immediate impact from this. But down the road, things could get a little rough. With proper preparation now (even better if you’ve been preparing for a few weeks or months  now), you should be able to weather things fairly well.

What are you doing to prepare for the future?
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.