A decade has passed since the second worst recession of modern times wiped out more than $10 trillion in stock and home values. People are feeling good about the sustained bull market.

But nothing good lasts forever and it will all come down again at some point, but probably not with the crash that shook the financial ground in 2008. At that time, stocks took a $6.9 trillion tumble and homeowners lost $3.3 trillion in home values.

The stock market has gained more than 300% since bottoming out in early 2009, and many economists and advisors feel it cannot be sustained at the current level for much longer. That kind of thinking became widespread in last year’s fourth quarter, when the S&P 500 declined 19.8%.

However, the next downturn is unlikely to replay 2008 and 2009 all over again. “Both companies and individuals have better balance sheets now than they did in 2008,” says James Sullivan, vice president and financial advisor at Essex Financial, a financial services firm in Essex, Conn. The unemployment rate is still good and the economy, although slowing, is still growing. “That will stop the snowball effect we had 10 years ago.”

When a downturn happens, “It will still be painful. We cannot predict when it will come, but markets historically tend to recover quickly,” notes Nevenka Vrdoljak, director of retirement strategies at Merrill Lynch.

The question is what should advisors and their clients do now to prepare themselves to minimize the pain, especially if retirement is looming in the near future and disbursements, rather than accumulation, are going to be needed? “I wish I had some surprise answer for you that no one had thought of before, but I don’t,” says Andrew Crowell, vice chairman of wealth management at D.A. Davidson & Co., an employee-owned investment firm based in Great Falls, Mont. “Having a plan in advance is the key to success. If you know your time horizon, your risk tolerance and your asset needs, you establish a plan ahead of time.”

Even if a client is 60 or 65 years old, he or she can live another 30 years, and “it is inevitable there will be a recession during that time,” he says. “If the client was in cash in 2008, he was all right, but if he was in equities, he was in trouble. Asset allocation and diversification in each category is a key in any market. If you have all Google, Amazon and Facebook, that is not diversification.”

Advisors can present numerous possibilities to clients facing retirement, but it all should be thought about and planned ahead of time in order to provide protection for retirement money, advisors agree.

For instance, “put options get a very bad reputation sometimes because they are mistaken for risk, but if you purchase a put option now for a reasonable price and the stock falls, you have protection. It can be like buying insurance for your portfolio,” Crowell says.

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