By Gary Silverman, CFP®

For the last many weeks we’ve talked about what to do with your portfolio to get it through this crisis and keep it growing for a long, long time.

But what if you don’t have a long time?

My admonitions on not investing in the stock market if you have a short-term goal (or a mid-term one if you tend to be skittish) might be true, but it doesn’t help in this after-the-fact time we are now in. What if you are two years from needing the money? One year? A few months?

I imagine there are quite a few of you who didn’t have a short-term need before,  but are now experiencing a long furlough, a lost job, or a failing business that was beyond your ability to conceive a couple of months ago.

The problem is that while in the long-term stocks go up, in the short term we just don’t know where they are going to go. Just because they are down a lot doesn’t mean they won’t be down more. Nor does it mean they won’t pop back up this year.

We just don’t know. Nobody does.

So here is where you must consider the worst that might happen. What if the stocks in your portfolio drop another 20-30% from where they are now this year or next? If you have a Want then you can try to ride it out and hope that doesn’t happen. If it does, you just don’t get your Want.

If you have a Need, then you cannot afford to just hope. You could hang in there—after all, the longer you have, the better the probability that you will make back some of your losses. Yet, we go back to that worst case scenario…the losses can get worse.

It’s time to look in the mirror and ask yourself just how bad you’d feel if you cashed out now and then the market moves up. Now imagine just how bad you’d feel if you don’t cash out and the market is considerably lower than it is now.

Before doing anything drastic, realize that just because your portfolio is way down doesn’t mean that everything in it is. If you have government bonds somewhere in there—they probably are up in value. Corporate bonds might have a gain, or certainly just a small loss compared to stocks. And even some of the mutual funds you might own that are down might be of the “balanced” variety which would shelter them from the worst of it—yes, you’d sell at a loss, but not near as bad as some other investments you might have.

But if you were seduced by the very long and dramatic bull market, you might have ended up heavy or exclusively in the stock market.

As much as it pains me to say it, if you have a Need in the next year, you probably need to take your losses now. But before you do it, get advice from someone who knows the specifics of your situation. They might have ideas that you’re just not yet considering.

 Gary Silverman, CFP® is the founder of Personal Money Planning, LLC, a Wichita Falls retirement planning and investment management firm and author of Real World Investing.