Bad market got you down? Here’s a handful of ideas that could help you during what is rapidly becoming a very violent ride:

FORGET YOUR EMOTIONS. Do you have a diversified stock portfolio? Are you invested in more traditional stocks? Do you have a long time (typically ten years or more) until you need the money? If you answered “yes” to any or all the above, you may want to consider checking your emotions at the door, not panicking, riding it out and get this…. actually investing in more stock.

WHAT THE HECK ARE YOU DOING IN THE MARKET? The exact opposite of the above: do you have a poorly diversified portfolio? Are you invested in junky stuff? Do you have a short time horizon before you need the money you’ve invested? Are you deep into retirement?

If you answered “yes” to at any or all of the above, you may want to seriously consider bailing out before you ride this market down where the end result can be steep losses, an extended working life, or even worse, getting tossed out of your house. … Remember the simple rule of success: if you don’t need the return that might not happen anyway, why take the risk?

CONSIDER MARKET INDEXED LINKED CDs. How about this unique concept: invest in the stock markets and if you get hit hard, hold the position until maturity and you’ll get your money back. If that doesn’t sound good enough, how about this: the account is backed by FDIC insurance if held to maturity. In some cases, even if the market goes down, you can get your money back plus a little interest. … What’s the downside? …. If the markets go down and you want to get your money back, you’ll have to hold the position until maturity, which is typically anywhere from three to five years. Additionally, the tax treatment of these market index linked CDs can be very complex.

Other factors might not make this a suitable investment for you, but if you are worried about losing your money in the markets, you might want to check out these little known products that are sometimes referred to as “structured products,” “Growth CDs” or “Index CDs.”

INSURE YOUR INCOME. It’s amazing how many negative things I hear about Variable Annuities when their living benefits could bring you some security. Are you invested in the stock market with a period of time before you need to start drawing income from your investments? You may want to check out the new Variable Annuity benefits, commonly referred to as Living Benefits. … What does that mean? …. Although benefits fees and charges will greatly differ depending on which company you invest with, living benefits basically mean this: in the event your investments within the Variable Annuity goes down in value, you will earn a minimum amount of interest on your original investment that becomes the base in which your income is drawn from.

Conversely, in a typical investment account, if the account goes down in value and you later draw income from it, you are drawing your income from the value of your stocks. When investing in a Variable Annuity with a living benefit, your income is drawn from this benefit’s base which is typically the greater of the minimum amount of interest earned or the highest value the account once was. …. Confusing? …. Could be….. Worth the investment? ….. again, it could be….. It depends on a number of factors and a qualified, skilled and knowledgeable advisor that has your best interest at heart will likely help you determine whether or not you should consider these investments for your money. (Keep in mind that the ability to receive income from a VA is tied to the claims paying ability of the annuity company).

BUILD A LADDER. Investing in bond mutual funds? Values going down? … If they are, you might want to consider replacing the bond funds with individual bonds… Why? …. Well, here’s a trivia question - when a bond fund goes down in value, when do you get your investment back? …. The only honest answer is, “I’m really not sure.” But, when you invest in a bond ladder, you have dates of maturity when, if the bond values go down, you will get your investment back, which, for most people, is typically a very nice thing to know.

As with everything being discussed here (there are risks associated with any investment), don’t take it to heart and don’t rush out to invest in something like this unless you first speak to a qualified advisor.

PAY ATTENTION. I’m sitting on a plane right now traveling from Cancun, Mexico flying back to Los Angeles. Earlier today, the futures of the US market show there’s a likely possibility the markets will get ripped apart tomorrow due to a global sell-off, bond insurers getting downgraded and a number of other reasons.

If you are reading this, congratulations. You’re not only enduring one of my more dry, boring and conservative articles, but you are paying attention, which when it comes to their investments is something many people don’t do. So, if you are reading this, you’re doing a great job of exploring ideas of what to do during a violent market. But, don’t get lazy.

All portfolios, during good and bad markets deserve your attention. After all, this is your hard earned money we’re talking about, isn’t it?

THE MUTUAL FUND ALTERNATIVE. If the market tanks tomorrow (and, quite honestly, even if it doesn’t), you really should remember this: … imagine, we wake up tomorrow and the market is tanking. You are invested heavily in mutual funds and seeing financial Armageddon ahead, you want to cash out of the market. You call your broker to get out of the market first thing in the morning but the position can’t be sold until the end of the day.

Not good. But, if you were invested in something called Exchange-Traded Funds (an index that trades like a stock), you can get out on moment’s notice. … Diversification? … Ability to trade on moment’s notice? …. The opportunity to have better control of your investments? … That’s not a bad idea, but remember: there’s lots of reasons investments that don’t trade until the end of the day could make better sense for your portfolio, so don’t take all this to heart.

Just remember: the options do exist and it’s something you should likely explore when designing your investment portfolios.

GET SOME HELP. The financial services business is filled with stories of advisors that lost all their clients money, and in some horrible cases stole their client’s money. While there’s certainly some very bad advisors out there, any industry is filled with its share of bad apples. In the industry of financial advisors, I have to say that most people I have met are intensely honest and really do the right thing for their clients.

As such, if your veins are filled with stress and you don’t know what to do, why not take some time to interview a few advisors? The assistance and brainstorming sessions you can get could be one of the best dates you and your money have ever had.

DARE TO BE DIFFERENT. Earlier today a woman told me she was absolutely certain we were headed into the Great Depression Part II. Disappointed that she couldn’t make any money, I couldn’t help but introduce her to the concept of something called “inverse funds.” A speculative investment it is, but get this: the value of these funds go up when the market goes down. And in some cases, they go up double the percentage of a declining market.

While inverse funds are not a totally new concept, some of the funds are: several companies have started offering inverse funds in “narrow” market sectors such as financials, real estate, consumer goods, various international markets, etc., etc.. …. So, if you are like the woman above who is certain we are headed for global disaster and you want to continue speculating in the markets, don’t despair: these inverse funds might wind up bringing you the profits your money seeks. Of course, be sure to read the prospectus carefully investing in any mutual fund.

LEARN A NEW LANGUAGE. Have you read Thomas Friedman’s fantastic book, “The World is Flat?” It’s a fantastic book with one underlying concept: thanks to technology, innovation and a number of other factors, the world is no longer islands of countries, rather, an interconnected global society of economies and other things.

Although the global markets tanked yesterday and for (hopefully) a brief moment it may appear the world is on fire, chances are decent there are other countries to explore that are doing quite better than, for example, the US economy.

When exploring other parts of the world to invest in, however, I would highly suggest staying away from investing in individual companies (unless you a true wizard, picking individual companies in any market is a tough thing to do). Rather, consider using something such as an index Exchange Traded Fund to pick the country of your choice.

And one more for the road…..

START READING. Instead of watching American Idol tonight, spend a moment to read the paper…. a magazine…. Barron’s, The Wall Street Journal, or at best, a great book on investments. While there are loads of technical investment books to chose from, my guess is that most people will want to read something a bit light, easy to understand yet highly educational. While I don’t necessarily agree or endorse everything they say, I’ve read scores of them, and as for the simpler ones to suggest, a few that come immediately to mind are as follows (plagiarized from my previous blog):

• You’ve Lost It, Now What? How to Beat the Bear Market and Still Retire on Time (Jonathan Clements)
• The Millionaire Next Door (Stanley and Danko)
• 9 Steps to Financial Freedom (Suze Orman)
• The Trouble With Mutual Funds (Richard Rutner)
• Rich Dad, Poor Dad (Robert Kiyosaki)
• You Can Never Be Too Rich (by some guy named Alan Haft)

Bad market or good market, I hope the above ideas will help you out. In hopes the world isn’t being set on fire, I want to sincerely wish you all the best of success (and if I can be of personal help, visit my main site at www.alanhaft.com and drop us an email)…

Ever taste court commissary food? The chicken is pitiful and the burgers would serve mankind much better if they acted like a puck at the next NY Rangers ice hockey game. Adding insult to injury are the prices. Toss in a few extra dollars and you can easily afford a few Spicy Tuna Rolls over at Nobu.Perhaps you’re thinking, “why is an article about financial advice discussing court commissary food?” I don’t blame you for thinking that, but the type of food I’m talking about isn’t just any court commissary food, it’s the food found at the worst type of court imaginable: Probate Court.

Have you ever heard of “Probate Court?” What a nightmare. Probate Court is the place where estates of the deceased are settled. While it’s by far not the most pleasant subject to address, if you are a parent or have parents, it’s something you at least need to think about now so that later on no one has to experience bad food or more importantly, the painful process known as “Probate.”

In most cases, when someone passes away, a Will dictates who-gets-what. The assets of the estate then get distributed and everyone goes home. But in some cases, “who-gets-what” may not sound as easy as you may think. All it takes is for one jilted minded person to step forward and say “I should have got that” for things to go bad. If matters escalate, the estate can then get sued and this is where one may find themselves in Probate Court.

Probate can be very time consuming, frustrating and quite expensive in terms of legal and other fees. Imagine: a parent passes and all it takes is for one person to come forward and lay a claim to the estate. Although it’s certainly not the norm, I have witnessed many cases where the transfer of assets has long been upheld in the Probate Courts.

To avoid loved ones having to experience Probate Court, one of the greatest gifts you or your parents could leave behind is something called a “Living Trust.” A Living Trust is a legal entity created by an estate planning attorney that owns assets that are fully controlled by the parent during their lifetime. At death, the Will nested within the Living Trust then dictates who-gets-what. If someone isn’t happy with their inheritance or an unscrupulous stranger lays claim to the estate, then that’s too bad - assets passing to heirs through a Living Trust generally cannot be contested, which is by far one of a Trust’s greatest attributes.

A Living Trust can also do many other things as well including, but not limited to (a), helping reduce estate taxes, if any, (b), provide other important legal documents such as Living Wills that grants designated third parties the legal authority to carry out the wishes of the incapacitated and (c), help ensure assets being passed remain in the bloodline of the family and not to anyone else such as son and/or daughter-in-laws.

Eliminating the possibility of probate by creating a Living Trust is one of the most important estate planning concepts you and/or your parents should strongly consider. And while I’m at it, here’s a few other things you and your parents should be thinking about as well:

1. Where are those documents? Needless to say, the pain of death is obviously quite devastating. Making matters worse is having to find important documents left behind. Do yourself a favor: if you or your parents don’t have all the important documents in one easy to find, well-organized and fire protected safe place - get it all together and secured as soon as possible. One never knows what tomorrow brings and mercy on the person that has to go through the hardship of trying to find important documents while going through the devastating pain of loss.

2. IRA and Qualified Plan Designations: the transfer of IRAs and other qualified plans such as 401ks can be a real mess for the person receiving the accounts. For IRAs, make sure the beneficiary designations are current. I’ve seen many cases where the IRA beneficiary designations were outdated, making the transfer of the asset to the new recipient not only a very frustrating experience, but one that sometimes caused harsh and unnecessary tax ramifications as well. As for qualified plans such as 401ks, I would strongly urge most people to consider transferring the 401k to an IRA to avoid many of the pitfalls that could come up when a beneficiary receives the account. Although new laws have made the inheritance of these qualified plans a bit more liberal, they still can be quite complicated and cause unnecessary taxes. In almost all cases, the tax-free transfer of a 401k to an IRA is one of the most basic essentials of a highly efficient estate plan.

3. IRAs Part II: if you have an elderly parent(s) and you are the beneficiary of their IRA, ask yourself what you plan on doing with the account after you receive it. If you plan on maintaining the IRA as your own, then that’s fine. Chances are likely that you can maintain the inherited IRA “as your own” and only have to withdraw what’s called a “Required Minimum Distribution” every year. Doing so will allow you to “stretch” the IRA over your lifetime and thereby reap the magical rewards of compounding interest through the tax deferred accumulation an IRA provides. But if you plan on cashing out the account to take care of various needs, then I would highly advise you and your parent(s) to seek council with a qualified financial and/or tax advisor. In some cases, cashing out an IRA or converting it to a tax free Roth IRA might make much better sense. There are many reasons to consider either or other possible directions not listed here, all of which should be addressed with a qualified tax and/or investment advisor.

4. Speaking of taxes, there are other Taxation Issues to address as well: within nine months following a death, beneficiaries of an estate have to file one last tax return for the deceased. Understanding taxes that could be owed at death and how they are going to be paid for is a very important part of the planning process that also should not be ignored.

5. Lastly, Long Term Care should be an essential part of any parental plan. If an elderly parent is to get sick, or require prolonged long term care assistance, then one must ask “who’s going to pay for it?” Perhaps a Long Term Care policy should be considered. But if a parent is elderly or not in great shape, those policies will usually be cost prohibitive. Will one have to use their own assets to pay for their assistance? It’s typically quite possible. Are there enough resources to take care of this? What about government Medicaid programs? There are many laws surrounding Medicaid and it’s possible to shelter assets from what is commonly referred to as “the Medicaid spend down” that requires a parent to basically go broke before the government steps in to help. Protecting assets against the Medicaid spend down is a highly complex process and one that requires the attention of a skilled elder care attorney. Failure to plan is a plan to fail and I would highly recommend this important subject be addressed so that there’s no surprises or unnecessary frustration later on.

It is often said “nothing could be worse than death.” I say, “the only thing worse than death is having to food at the Probate Court commissary.” All bad humor aside, do yourself a big favor: address the issues above with a qualified advisor and/or an estate planning attorney so that a potentially painful process will be a bit easier to endure thanks to a little planning that will no doubt go a very long way.