I don’t know about you, but I am not particularly reassured by the headlines at the moment: rioting in Europe; the ongoing war between Ukraine and Russia; bombings in the Middle East; the escalation of conflict, with the threat of nuclear attacks; cyberattacks on banks and crypto platforms; significant stock-market manipulation that no one seems to be discussing; governments around the world advising citizens to stockpile food and essentials for 90 days; and AI proving to be far more dangerous than first suggested. I do not think it takes a crystal ball or a visit to a clairvoyant to see what may lie ahead.

From my perspective, the global economy and everything connected to it are about to receive a serious jolt. The upward trajectory of investment returns we have enjoyed over the past ten years could potentially be wiped out in the blink of an eye.

The last time we experienced a storm of this kind was the 2008 global financial crisis, when markets fell by 52 per cent and governments around the world introduced austerity measures and bailed out large corporations and financial institutions.

I am told I am slightly paranoid, but my retirement is closer than it was 18 years ago. Being cautious about protecting and preserving my hard-earned wealth is important.

So is being logical and practising what I have preached during my 26 years in the wealth-management industry. In today’s article, I will walk through five habits that can help protect your wealth when markets are falling and give it room to recover when they turn.

Let’s face it: a financial crisis feels personal, even when it is global. Headlines turn red, balances shrink, and every instinct tells us to act now. Yet the people who come through these periods in the best shape are rarely those who act the fastest.

Keep a clear head

The biggest danger in a crisis is not the market; it is your reaction to it, a point I need to remind myself of, too. Selling after a steep fall turns a temporary loss into a permanent one. What’s more, some of the best recovery days arrive during the worst weeks. Missing a handful of them can undo years of patient growth.

A simple way to stay level-headed is to slow things down. Make a rule that you won’t make a major decision on the day you feel most alarmed. Sleep on it, write down why you want to act, and read your reasons again the next morning. Often, the urge will have passed.

It also helps to remember that crises have ended before. Markets have weathered wars, pandemics, banking collapses and long recessions, and have gone on to reach new highs. That history is no guarantee of future performance, but it is a reminder that a falling market is a chapter, not the whole story.

Build a cash cushion

Cash is the quiet hero of every crisis. It pays your bills while everything else is uncertain and means you don’t have to sell good investments at bad prices just to cover your living costs. Many people are wise to hold enough to cover six to 12 months of essential spending. Those with irregular incomes or dependants may want to hold more.

Keep this money somewhere safe and easy to access. Chasing a slightly higher return defeats the purpose: your cash cushion is there for safety and access, not growth.

Think carefully about where you hold your cash, too. In a severe crisis, even banks can come under stress. Consider spreading your savings across more than one institution. Keeping your emergency fund separate from your everyday account can also make it harder to dip into by accident.

Spread your risk

Diversification is an old idea because it continues to work. Different assets behave differently under pressure. Shares may fall while government bonds hold steady; property, cash and commodities each have their own patterns. Holding a mix means that no single shock is likely to undo everything you have built.

Look beyond asset types, too. If all your wealth depends on one employer, industry, property or country, you carry a hidden risk. A crisis that starts in one place can spread quickly, but its effects are rarely equal everywhere. Holding investments across several regions and currencies can soften the impact if your home economy struggles.

Keep investing steadily

When prices fall, long-term investors are in an unusual position: the same amount of money buys more than it did last month. If you are still earning, investing regularly can help you take advantage of this without trying to guess the bottom, something nobody can do. You buy more units when prices are low and fewer when they are high. Over time, this can help reduce your average purchase price.

The key is to keep going when it is hardest. Many people stop contributing just when prices are low, then restart only after they have recovered. Automating your contributions can remove the temptation to second-guess yourself.

Rebalancing can help, too. If a fall has reduced the share of your portfolio invested in shares well below your target allocation, topping them up from safer holdings can help you buy low and restore your planned mix. It feels uncomfortable, which is why many people avoid it, but it is a disciplined way to maintain your investment strategy.

Protect what matters

A crisis can expose weak spots, and debt is often one of them. Loans with variable interest rates can become more expensive quickly when conditions tighten. Paying down expensive borrowing provides a certain saving on interest and frees up cash when you need flexibility most. Before the next downturn, review what you owe and how much of it could become more costly.

Finally, write down a plan. Decide what you will do if markets fall by 20 or 30 per cent, and who you will speak to before changing course. A plan made in calm times is much easier to follow than one made in a panic.

At the end of the day, wealth is built over decades, and a steady, slightly boring approach is usually what carries it through the hard years. Stay calm, keep your cash safe, spread your investments, keep investing and protect the people who depend on you. Crises pass, though recovery can take time.

• Carla Seely is chief operating officer at Freisenbruch Insurance Services Ltd and has 26 years of experience in international financial services, wealth management and insurance. Her professional qualifications include ACSI (UK), QAFP (FP Canada) and AINS (The Institutes), as well as several investment licences from the Canadian Securities Institute. She also holds a master's degree in Business and Management from the University of Essex

• For further inquiries or suggested topics, e-mail justaskcarla@outlook.com