But the thing is, if we get to a place where my investment accounts & credit card can't cover me for several months we as a society have much bigger problems. I'd prefer to not have to eat into those, and yes if the markets crash enough I'd have fewer months buffer in there. But if the shit hits the fan enough that I can't live off of it for a while I don't believe cash will help out a whole lot either.
Granted over the last couple of months the net value of that money would have dropped less if it were cash than in my investment accounts. But that's another matter altogether.
Timing the market is a fool's errand, and it gets no easier during a time of recession.
Unfortunately for me, I followed conventional advice. I saved a cash emergency fund and only allocated ~20% of my investment budget to Bitcoin. The cash inflated away and I have orders of magnitude less Bitcoin than my friends.
- have 6-12 months of emergency cash that can sustain you if your main source of income fails. something will always happen, whether it's an appliance or car that breaks down, or an unexpected medical expense. slush funds are good.
- 'if it ain't broke, don't fix it'. make stuff last the extra mile, if you can. stretching electronics and clothes .... fixing electronics (when realistic) instead of buying the new shiny thing ...
- don't sell stocks. if anything; if you're fortunate enough to truly have extra cash, buy that stock at rock-bottom prices you've been eyeballing for a while. buy low, sell high.
- if you have dependents, be extra conservative with your cash. you will need each other.
- this too, shall pass.