As always, when things get nutty in the markets cash is king. A healthy cushion in bank CDs or money market funds will let you ride out the slump without having to sells assets at fire-sale prices. A cushion will also put you in position to invest when the downturn's bottom is in sight and that could come sooner than you expect. Mark Henn, a financial planner at Harvest Advisors in Cincinnati, says that stocks usually get a lift when the government takes extraordinary steps to fix a crisis like taking ownership stakes in private banks. That's being done now in the U.S. and other countries. "It doesn't feel comfortable," he concedes. "But now's the time to buy while things are on sale." Tread slowly if you do jump back in, though, and before you go bargain hunting first build your cash position to at least a year's worth of living expenses, longer if you are retired.