In November, millions of Americans voted to return Donald Trump to the White House. Many of them made their decision based on the belief that he would strengthen the economy. But many economists and financial experts have sounded the alarm that Trump’s policies could do more harm than good — potentially much more harm.

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Anthony Scaramucci occupies a unique position among these critics. He served in the Trump 1.0 administration as White House Communications Director for such a short time that the term “a Scarmucci” entered the cultural lexicon as shorthand for “a brief period.” He spent the 2024 election season as one of Trump’s staunchest foes, largely because of the damage he believes Trump’s policies could do to the economy.

Scaramucci has gone on record predicting the stock market could crash during Trump’s second term. He argued that plans for mass deportations and tariffs could raise the prices of consumer goods. On one MSNBC panel before the election, he warned that Trump’s policies could “explode the deficit” and that stripping the Federal Reserve of its independence could lead to “a massacre of the local currency.”

It sounds terrible. But wringing your hands is not as good as planning ahead. At best, Scaramucci is wrong, and you’ve adopted some positive financial habits. If he’s right – at least you’ll be ready.

1. Diversify, diversify, diversify

You know what they say about eggs and baskets. Just as you don’t want to put all your eggs in one basket, no matter how big and beautiful it may seem, you don’t want to put all your resources into a single investment. To reduce risk, especially when it comes to your retirement savings, it’s wise to spread your savings across individual stocks, mutual funds or exchange-traded funds (ETFs).

Consider getting even more creative with your investments. For example, precious metals can provide protection against market volatility. Other options include real estate, bonds, cash value life insurance, annuities, and even alternative holdings, such as oil and gas.

If you sense bad times on the financial horizon, a diversified portfolio gives you the freedom to adapt. You can allocate funds to investments that seem safer, even if only temporarily. That way, even if the worst happens, you still have a safety net.

2. Educate yourself

When difficult periods arise, it’s tempting to bury your head in the sand. Hearing about the recent downturn and financial panic can be overwhelming. But fear shouldn’t rule your financial decisions.

The best way to protect your investments is to be clear about what you own and why you own it. Examine each stock in your portfolio and assess its value to you. When alarming headlines pop up, resist the urge to make hasty decisions. Instead, you know whether to hold onto or let go of specific assets.

By regularly reviewing your portfolio and having honest conversations with a trusted financial advisor, you can keep your decision-making grounded. This approach will help you avoid hasty and potentially harmful financial decisions.

3. Become debt free

Clearing your debt, especially high-interest debt like credit card balances, is always a smart move. It becomes even more critical during economic downturns that often follow market crashes. If you’re feeling overwhelmed by debt, it may be time to liquidate some holdings to pay them off.

Reducing your debt before a bear market emerges from the financial forest puts you in a stronger position to weather challenging times – and to recover once the bull market re-enters the picture.

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According to Anthony Scaramucci, a second Trump presidency could bring significant economic challenges, including a potential market crash. Don’t panic. By diversifying your portfolio, staying informed and eliminating debt, you can weather any financial storm – and come out stronger on the other side.

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This article was originally published on GOBankingRates.com: Anthony Scaramucci predicts a market crash under Trump – here’s how to prepare if he’s right