3 in 4 Americans Anticipate a Volatile Stock Market in 2024. Here's How to Prepare for One

The very start of 2024 was a rocky one for the stock market. And while things have since settled down, it's hard to know what the rest of the year has in store for investors.

Recent data from Allianz Life Insurance Company finds that only 47% of Americans think the economy will improve in 2024. And 74% think the stock market will be very volatile in 2024. If you're in the latter camp, you may be stressed over the idea of a wild market. But if you do these things, a volatile market shouldn't really worry you.

1. Make sure you're loaded up on emergency savings

You never know when your brokerage account might take a serious dive due to general market volatility. Now, imagine your car needs work the very same week stocks are down 10% from a recent high. If you're forced to liquidate some of your stocks right then and there because you need cash to pay for your car repairs, you're going to lock in losses in your portfolio.

That's why it's so important to have a fully loaded emergency fund if you're anticipating a year of stock market volatility. In fact, it's a good idea to have plenty of emergency savings even if you expect a calm year for stocks, because you just never know. If you have plenty of cash in the bank for unexpected bills, you won't have to tap your portfolio at the wrong time and risk locking in losses.

RELATED: Emergency Fund Calculator

In the aforementioned scenario, let's say your portfolio loses 10% of its value one week due to market volatility but you don't sell off any assets. A few weeks later, it might recover that 10% in full. Give yourself the option to leave your investments alone by having emergency savings, so you can ride out the market's rough patches.

2. Make sure the money you have invested is money you don't plan to use for a long time

A volatile stock market can be unsettling, no matter your age or circumstances. But if you know you're not planning to tap your stock portfolio anytime soon, that knowledge makes that volatility a lot more palatable.

If you're worried that 2024 is going to be a wild year for stocks, think about what you're planning to use your portfolio for. If it's retirement, and you're in your 30s, there's really not much to worry about. In that case, you have plenty of time to ride out a stock market downturn, should that come to be.

But let's say you're 63 years old with a stock-heavy portfolio and are planning to retire at age 65. In that case, a volatile stock market should worry you, as it has the potential to mess with your near-term plans. And in that situation, you'd be wise to move some of your holdings out of stocks and into more stable investments, like bonds, before your portfolio loses value.

Stock market volatility is actually a pretty ordinary thing. And remember, volatility isn't always bad. If the stock market loses 8% of its value one week but gains that 8% back and then some the following week, you're not any worse off as long as you didn't sell any assets during that dip.

But if you're worried about how things will play out in 2024, do yourself a favor -- load up your emergency fund with cash and make sure you're investing for a long enough window to ride out any market-related hiccups.