By Michael Whitman

So far this morning, U.S. stocks have been free-falling…again.

For the second time in two weeks, investors are showing signs of panic.

And with good reason.

The market has already been bracing for a hint that an interest rate hike could be coming in the short-term.  And if the Fed indicates — in just a few weeks’ time — that may be a reality…then we could see a fast-moving market crash that could resemble what happened in 2008.

No one, of course, knows for sure what will happen in the weeks ahead.

But there are some steps you can take now in order to prepare yourself in the event that this market slide continues…or in the event that September brings the same kind of fast-moving crash we saw seven years ago.

1. Add some bond exposure to your portfolio as soon as possible.  If disaster strikes — in whatever form — then equities could fall sharply…as we’ve started to see.  This could go hand-in-hand with a rise in the value of bonds — as has happened in the past.  In particular, you should consider adding carefully-selected Real Estate Investment Trusts (REITs) as these represent a “real” asset (real estate) that often holds value in times when equities are plummeting.

2. Consider international diversification. This can be tricky — especially with the trouble we’ve seen in Europe and China.  But just because stocks are falling in the United States…that doesn’t mean other markets aren’t still growing. (A wise old colleague of mine liked to say, “There’s always a bull market somewhere.”  And that’s absolutely true.)  Carefully selected international ETFs (exchange-traded funds) could provide the diversity you need at this time.

3. Invest in gold. I know, I know…your grandfather used to swear that gold was the only “real” money. But the truth of the matter is that gold can’t go bankrupt. And it can’t “crash” the way a currency or stock market can. Owning physical gold isn’t as easy as, say, buying a gold ETF of a precious metals-oriented mutual fund. But it can be a wise hedge against a potential prolonged economic crisis in the United States.