Prepare for Recession?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
jharkin
Posts: 2480
Joined: Mon Mar 28, 2016 7:14 am
Location: Boston suburbs

Re: Prepare for Recession?

Post by jharkin » Fri Aug 23, 2019 9:24 am

TomatoTomahto wrote:
Fri Aug 23, 2019 8:48 am
jharkin wrote:I survived both those recessions with my job intact - in high tech! I did it by busting my #(*&$#% to become known as one of the best at what I do in the division, along with networking to build visibility and gain high level management "mentors" (aka playing office politics)
While there are no guarantees, being viewed as someone important to the business will make you among the last to be let go, if it comes to that. Those with the increasingly prevalent “what’s in it for me?” mentality might get a chance to Retire Early even if they’re not quite Financially Independent (FIRE).
Well said. Funny how many "that's not my job" people I knew through the years where surprised with a pink slip.

Meanwhile Ive always started every conversation with "how can I help" and never really worried about my job security .. even after going though so many corporate restructurings in my career that I lost count long ago.

User avatar
TomatoTomahto
Posts: 9956
Joined: Mon Apr 11, 2011 1:48 pm

Re: Prepare for Recession?

Post by TomatoTomahto » Fri Aug 23, 2019 10:05 am

jharkin wrote:
Fri Aug 23, 2019 9:24 am
Meanwhile Ive always started every conversation with "how can I help" and never really worried about my job security .. even after going though so many corporate restructurings in my career that I lost count long ago.
That’s the right attitude. Never let a good crisis/restructuring/recession go to waste. When I was still working for a paycheck, I’d marvel at the resentment of people who were let go or passed over for promotion, who apparently never asked themselves how they made their boss’s life better.
Okay, I get it; I won't be political or controversial. The Earth is flat.

truenorth418
Posts: 466
Joined: Wed Dec 19, 2012 7:38 am

Re: Prepare for Recession?

Post by truenorth418 » Fri Aug 23, 2019 10:12 am

apple44 wrote:
Wed Aug 21, 2019 5:23 pm
There has been a lot of talk recently about the upcoming recession. The rumor is that a recession is coming in the next 12 months.
I don't watch the news so I must have missed these "rumors". When will this "upcoming recession" begin?

retiredjg
Posts: 39887
Joined: Thu Jan 10, 2008 12:56 pm

Re: Prepare for Recession?

Post by retiredjg » Fri Aug 23, 2019 2:17 pm

brandy wrote:
Thu Aug 22, 2019 6:11 pm
My "cash" is mostly in CDs at a distant credit union--they are my emergency fund. Should I end those coming to maturity to put greenbacks in a local CU or under the mattress?
I'm on SS with a tiny pension and standard bills--utility, insurance, taxes, food, etc.
I have not found that I need more cash available than the amount I need for monthly bills. If something larger comes up, I can have money in my checking account in 2 or 3 days from my IRA at Vanguard.

So my answer is that your CDs are likely fine. However, people have different feelings about this. Some might like to have some cash in the CU or under the mattress.

Northern Flicker
Posts: 5380
Joined: Fri Apr 10, 2015 12:29 am

Re: Prepare for Recession?

Post by Northern Flicker » Sat Aug 24, 2019 3:13 pm

apple44 wrote:
Thu Aug 22, 2019 10:23 am
Thanks everyone for the advice. Good to hear no drastic changes are needed.
It would not be a bad time to review your asset allocation and confirm that you are not taking more risk than is consistent with your tolerance and capacity to do so.

I started out investing in 1987 with a small investment in an S&P500 index fund. The bear markets in 1987, 2000-2002, and 2008-2009 were the market downturns that captured my emotional attention.

Nobody saw the 1987 crash coming. Everyone saw the 2000-2002 crash coming, but 9/11 was an unpredictable extra wrinkle that caused a double-dip market downturn. The 2008-2009 crash wasn’t a huge surprise that it happened but the severity took a lot of people by surprise big time, apparently including even Ben Bernanke.
Last edited by Northern Flicker on Sat Aug 24, 2019 7:51 pm, edited 2 times in total.
Risk provides no guarantee of return.

theplayer11
Posts: 1071
Joined: Tue Jul 22, 2014 8:55 pm

Re: Prepare for Recession?

Post by theplayer11 » Sat Aug 24, 2019 3:17 pm

lol..upcoming recession

bck63
Posts: 951
Joined: Fri Sep 28, 2018 4:59 pm

Re: Prepare for Recession?

Post by bck63 » Sat Aug 24, 2019 3:49 pm

I'm simply sticking with Larry Swedroe's excellent advice:

1. Ignore all forecasts.

2. Give up trying to beat the market.

3. Don’t try and time the market.

4. Avoid active funds and keep costs low.

User avatar
unclescrooge
Posts: 4508
Joined: Thu Jun 07, 2012 7:00 pm

Re: Prepare for Recession?

Post by unclescrooge » Sat Aug 24, 2019 4:02 pm

rascott wrote:
Thu Aug 22, 2019 10:57 am
apple44 wrote:
Wed Aug 21, 2019 5:23 pm
There has been a lot of talk recently about the upcoming recession. The rumor is that a recession is coming in the next 12 months. So do we need to do anything to prepare for it?
All I can think of is to stack up emergency funds because if we lose jobs, it will be difficult to find a new one.
Anybody who's weathered recessions before have any wisdom to share?

Economists are worse at predicting recessions than a weather person predicting the weather next month.

Ignore the noise.
Indeed. The joke is God created economists to make weather forecasters look good.

User avatar
Clever_Username
Posts: 1431
Joined: Sun Jul 15, 2012 12:24 am
Location: Southern California

Re: Prepare for Recession?

Post by Clever_Username » Sat Aug 24, 2019 7:33 pm

I have only been paying attention to investments since 2011 and I think every year since then was virtually guaranteed to be the start of a recession for one reason or another. Eventually it will happen, but that's why I have an asset allocation.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ | | I survived my first downturn and all I got was this signature line.

User avatar
willthrill81
Posts: 17360
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Prepare for Recession?

Post by willthrill81 » Sat Aug 24, 2019 7:37 pm

Northern Flicker wrote:
Wed Aug 21, 2019 5:29 pm
apple44 wrote:
Wed Aug 21, 2019 5:23 pm
There has been a lot of talk recently about the upcoming recession. The rumor is that a recession is coming in the next 12 months. So do we need to do anything to prepare for it?
All I can think of is to stack up emergency funds because if we lose jobs, it will be difficult to find a new one.
Anybody who's weathered recessions before have any wisdom to share?
You should always be prepared for a possible recession, even when the outlook is very bullish because nobody knows when a recession will arrive. Thus, the only reason for a change would be if your were not already prepared for a recession. The preparation is choosing an asset allocation where you can tolerate the downturn without pulling out of the market at the bottom, instead just rebalancing back to your allocation when the portfolio has drifted from it.
Well said.

If I were a betting man, I'd say that all of the talk about a 'recession around the corner' for the last year at least might just keep one from occurring as quickly as it would have otherwise. But I really don't know and am not betting on anyone's intuition or gut instinct, including my own.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

sambb
Posts: 2858
Joined: Sun Mar 10, 2013 3:31 pm

Re: Prepare for Recession?

Post by sambb » Sat Aug 24, 2019 7:52 pm

I dont know what happened since summer 2015, but the US market has done very will since then and unemployment is at a record low.
Sure there will be recession, but the economic advancement in the last few years can always cool down. Many have a lot of gains, so a down year isnt the end of the world. It is hard to even find people to hire for many jobs, as quality applicants are in high demand. A good time to test the waters for new jobs.

User avatar
LadyGeek
Site Admin
Posts: 60865
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Prepare for Recession?

Post by LadyGeek » Sat Aug 24, 2019 8:26 pm

I removed an off-topic post and reply. As a reminder, this is a "no politics" forum, regardless if the politician is named (or not). See: Politics and Religion
In order to avoid the inevitable frictions that arise from these topics, political or religious posts and comments are prohibited. The only exceptions to this rule are:
  • Common religious expressions such as sending your prayers to an ailing member.
  • Usage of factual and non-derogatory political labels when necessary to the discussion at hand.
  • Discussions about enacted laws or regulations that affect the individual investor. Note that discussions of proposed legislation are prohibited.
  • Proposed regulations that are directly related to investing may be discussed if and when they are published for public comments.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

User avatar
TheAccountant
Posts: 261
Joined: Sun Nov 05, 2017 4:21 pm
Location: USA
Contact:

Re: Prepare for Recession?

Post by TheAccountant » Sat Aug 24, 2019 9:22 pm

UpperNwGuy wrote:
Wed Aug 21, 2019 5:27 pm
If you’ve been maintaining an asset allocation that matches your risk tolerance, and keeping your emergency fund up to date, then you’re already prepared for whatever the economy might do. No special actions need be taken.
+1.

mrsbetsy
Posts: 217
Joined: Mon Jun 26, 2017 12:16 am

Re: Prepare for Recession?

Post by mrsbetsy » Sat Aug 24, 2019 9:54 pm

I own a small business and my husband owns a different one. Mine is not subject to recession, but his certainly is - tariffs are hitting him hard because his product includes a small motorized part, which has increased in price making him less competitive. But he will survive because he is the "secret sauce" despite his cost of goods being higher/margins lower. Folks just like and trust him.

We have a paid off house, completely debt free, a nice liquid emergency fund, and live well below our means.

That's the best we can do.

My heart did sink a little on Friday with the big drop...but it was a momentary emotional response. We've lived through these ups and downs before.

I suggest you create a mission statement that keeps you sane.

User avatar
NearlyRetired
Posts: 146
Joined: Fri Aug 09, 2019 12:56 pm
Location: United Kingdom

Re: Prepare for Recession?

Post by NearlyRetired » Sun Aug 25, 2019 9:53 am

retiredjg wrote:
Thu Aug 22, 2019 4:09 pm
JHU ALmuni wrote:
Thu Aug 22, 2019 11:25 am
Serious question, how do you prepare for recession assuming it's coming??
A recession is always coming. A recession is an economic downturn. It is not a market downturn.
That is a interesting comment - something I had not considered. Are you aware of any research showing whether there is/is not any correlation between recessions and market downturns that I could look at?
To err is to be human, to really mess up, use a computer

retiredjg
Posts: 39887
Joined: Thu Jan 10, 2008 12:56 pm

Re: Prepare for Recession?

Post by retiredjg » Sun Aug 25, 2019 10:09 am

NearlyRetired wrote:
Sun Aug 25, 2019 9:53 am
retiredjg wrote:
Thu Aug 22, 2019 4:09 pm
JHU ALmuni wrote:
Thu Aug 22, 2019 11:25 am
Serious question, how do you prepare for recession assuming it's coming??
A recession is always coming. A recession is an economic downturn. It is not a market downturn.
That is a interesting comment - something I had not considered. Are you aware of any research showing whether there is/is not any correlation between recessions and market downturns that I could look at?
I am not an economist. :happy

Awhile back, after the "Great Recession" got named, I realized didn't quite know what a recession was. I did notice that people started saying "recession" when they were talking about the market and I wondered about that.

I just used google and asked what the difference was between a recession and an extended bear market. Did the usual casual research, read some pages and looked at some charts. Nothing more than that.

Turned out a recession and a bad market are not the same thing and do not necessarily accompany each other although one can precede or follow the other. That's what the internet thinks anyway.

Unfortunately, the damage is now done. Since the Great Recession accompanied a long extended bear market, people now use "recession' to refer to a bad market and that is not correct at all (in my understanding).

theplayer11
Posts: 1071
Joined: Tue Jul 22, 2014 8:55 pm

Re: Prepare for Recession?

Post by theplayer11 » Sun Aug 25, 2019 11:19 am

retiredjg wrote:
Sun Aug 25, 2019 10:09 am
NearlyRetired wrote:
Sun Aug 25, 2019 9:53 am
retiredjg wrote:
Thu Aug 22, 2019 4:09 pm
JHU ALmuni wrote:
Thu Aug 22, 2019 11:25 am
Serious question, how do you prepare for recession assuming it's coming??
A recession is always coming. A recession is an economic downturn. It is not a market downturn.
That is a interesting comment - something I had not considered. Are you aware of any research showing whether there is/is not any correlation between recessions and market downturns that I could look at?
I am not an economist. :happy

Awhile back, after the "Great Recession" got named, I realized didn't quite know what a recession was. I did notice that people started saying "recession" when they were talking about the market and I wondered about that.

I just used google and asked what the difference was between a recession and an extended bear market. Did the usual casual research, read some pages and looked at some charts. Nothing more than that.

Turned out a recession and a bad market are not the same thing and do not necessarily accompany each other although one can precede or follow the other. That's what the internet thinks anyway.

Unfortunately, the damage is now done. Since the Great Recession accompanied a long extended bear market, people now use "recession' to refer to a bad market and that is not correct at all (in my understanding).
one would think the correlation is extremely high. A downtown in the economy would mean less profit for companies which would lead to lower stock prices.

MathIsMyWayr
Posts: 1444
Joined: Mon Mar 27, 2017 10:47 pm
Location: CA

Re: Prepare for Recession?

Post by MathIsMyWayr » Sun Aug 25, 2019 11:48 am

Recession and market downturn are inevitable in a market economy. I am not an economist, but capitalism is so efficient at production that an economic expansion will lead to over-production at some point in time.
The effect of a recession on wage earners or business owners is obvious. For those who do not depend on wages or income, e.g., retirees, a market downturn rather than a recession is a major concern. For those who depend heavily on withdrawing from savings for living expenses should maintain an AA conservative enough to guard against possible market downturns. However, if the fixed income, i.e., SS+pension+annuities, exceeds living expenses, a market downturn is an opportunity for those fortunate retirees. Yes, life is not fair, but that's the way it is.

retiredjg
Posts: 39887
Joined: Thu Jan 10, 2008 12:56 pm

Re: Prepare for Recession?

Post by retiredjg » Sun Aug 25, 2019 2:28 pm

theplayer11 wrote:
Sun Aug 25, 2019 11:19 am
retiredjg wrote:
Sun Aug 25, 2019 10:09 am
NearlyRetired wrote:
Sun Aug 25, 2019 9:53 am
retiredjg wrote:
Thu Aug 22, 2019 4:09 pm
JHU ALmuni wrote:
Thu Aug 22, 2019 11:25 am
Serious question, how do you prepare for recession assuming it's coming??
A recession is always coming. A recession is an economic downturn. It is not a market downturn.
That is a interesting comment - something I had not considered. Are you aware of any research showing whether there is/is not any correlation between recessions and market downturns that I could look at?
I am not an economist. :happy

Awhile back, after the "Great Recession" got named, I realized didn't quite know what a recession was. I did notice that people started saying "recession" when they were talking about the market and I wondered about that.

I just used google and asked what the difference was between a recession and an extended bear market. Did the usual casual research, read some pages and looked at some charts. Nothing more than that.

Turned out a recession and a bad market are not the same thing and do not necessarily accompany each other although one can precede or follow the other. That's what the internet thinks anyway.

Unfortunately, the damage is now done. Since the Great Recession accompanied a long extended bear market, people now use "recession' to refer to a bad market and that is not correct at all (in my understanding).
one would think the correlation is extremely high. A downtown in the economy would mean less profit for companies which would lead to lower stock prices.
From what I read, the correlation is high but not extremely high. However, I did not do exhaustive research.

More importantly, I think recession means worrying about your job and current income while bad market means worrying about your nest egg. In my mind, these are very different things and that is why I think it is important to use the right word, especially when asking questions.

This thread is an example. The original poster is asking how to prepare for a recession. But the poster is getting answers about how to prepare for a bad market. Not the same thing....

tibbitts
Posts: 9709
Joined: Tue Feb 27, 2007 6:50 pm

Re: Prepare for Recession?

Post by tibbitts » Sun Aug 25, 2019 3:09 pm

apple44 wrote:
Wed Aug 21, 2019 5:23 pm
There has been a lot of talk recently about the upcoming recession. The rumor is that a recession is coming in the next 12 months. So do we need to do anything to prepare for it?
All I can think of is to stack up emergency funds because if we lose jobs, it will be difficult to find a new one.
Anybody who's weathered recessions before have any wisdom to share?
Almost everybody here has weathered recessions before. I think a lot of people outside of Bogleheads are associating 2008/9 with "recession", but that was not a typical recession. Recessions aren't always deep - or long, etc.

I would worry more about depressed investing returns, no salary growth, and limited employment prospects for the rest of your life. If we get .0001% growth forever we'll never have a recession but nobody will feel great about it.

TravelGeek
Posts: 3312
Joined: Sat Oct 25, 2014 3:23 pm

Re: Prepare for Recession?

Post by TravelGeek » Sun Aug 25, 2019 3:35 pm

Sandtrap wrote:
Thu Aug 22, 2019 11:46 am
apple44 wrote:
Thu Aug 22, 2019 10:19 am

I heard it on NPR that more than half of the financial analysts believe a recession is coming in the next 12 months in a recent survey, but couldn't find that survey now. However, I did find this one on Washington Post: 3 out of 4 economists predict a U.S. recession by 2021, survey finds
https://www.washingtonpost.com/business ... vey-finds/.

Also, I'm in the real estate financing industry and my clients are actively preparing for the downturn, by borrowing money from the bank or selling assets now, so that they'll have sufficient capital to buy real estate once price drops.
A thought with implications.. . .
"There are 6 major companies that own nearly "all" of the media (print/digital/video/etc)"
Source:
https://www.webfx.com/data/the-6-compan ... all-media/
This is a very good reason to be careful with the information we are exposed to, ignore the noise, and stay the course.
j
And... ironically the Washington Post is not actually among the "media" that is owned by those six major companies :)

My "thought with implication" in this case would be that the owner of the WP would likely prefer to not see the economy slide into a recession because he'd rather sell more stuff to us through his other businesses. But I am not actually believing in most conspiracy theories, one way or another.

I do believe that a recession is coming. Eventually. Maybe sooner than later. And it seems Jack Bogle was somewhat concerned about the markets:

https://www.cnbc.com/2018/12/31/jack-bo ... ution.html
Jack Bogle, founder of index fund giant Vanguard Group, is warning investors to prepare for 2019 by decreasing exposure to stocks and increasing investment in defensive strategies, such as fixed income securities like bonds.

“Trees don’t grow to the sky, and I see clouds on the horizon. I don’t know if and when they’ll arrive. A little extra caution should be the watchword,” Bogle said, speaking in an interview with Barron’s published this weekend. “If you were comfortable at a 70 percent to 30 percent [allocation to stocks and fixed income], under these circumstances you’d like to go back to 60 percent to 40 percent, or something like that.”
(Barron's story: https://www.barrons.com/articles/vangua ... 1545950443)

I am prepared and sleeping well. It may help that I am not actually employed or planning to look for a job.

User avatar
scubadiver
Posts: 1150
Joined: Sun May 04, 2008 9:48 pm

Re: Prepare for Recession?

Post by scubadiver » Sun Aug 25, 2019 5:00 pm

TravelGeek wrote:
Sun Aug 25, 2019 3:35 pm
I do believe that a recession is coming. Eventually. Maybe sooner than later. And it seems Jack Bogle was somewhat concerned about the markets:
With all due respect to Mr. Bogle, who will be long remembered in history, his claim to fame was not predicting business cycles.

Keeping my response actionable, my recommendation to the OP would be to follow-up on the great advice already offered in this thread and set your asset allocation at a level that you are comfortable with in both good times and bad. Follow that up by ignoring some of the noise that is out there.

JackoC
Posts: 1088
Joined: Sun Aug 12, 2018 11:14 am

Re: Prepare for Recession?

Post by JackoC » Sun Aug 25, 2019 5:07 pm

retiredjg wrote:
Wed Aug 21, 2019 5:38 pm
apple44 wrote:
Wed Aug 21, 2019 5:23 pm
There has been a lot of talk recently about the upcoming recession. The rumor is that a recession is coming in the next 12 months. So do we need to do anything to prepare for it?
All I can think of is to stack up emergency funds because if we lose jobs, it will be difficult to find a new one.
Anybody who's weathered recessions before have any wisdom to share?
Remember that a recession is not the same thing as a market downturn/bear market. Sometimes they occur at the same times. Sometimes, you can have one without the other. There have been dozens of recessions that were not accompanied by bad markets.

You should always be prepared for either a recession or an extended bear market. All the time.

If you are not there yet, things like bumping up your emergency fund and adjusting your asset allocation to what you can tolerate during a bad market are the right things to do. That is how to be prepared all the time.
I agree on that distinction, stock market downturn v recession. Also as to predictability. Market shocks are like lightning. Economic shocks caused by big market downturns are like thunder. In late 2008 for example there was no way to predict if/when the market would recover just as there's nobody who can *consistently* predict when down turns like that will start, or anyway the average investor is foolish to think they can. But once you saw the big lightning flash of the late 2008 market downturn, and particularly the seizing up of credit markets, it was predictable that the resulting thunder would hit the real economy, hard, in a few months.

So at that time there was no way IMO to predict how much further the market would go down and when it would recover (as refresher things were looking a little better by 2008 year end, then got worse in early 2009 and market bottomed in March). But, you might have done something to shore up you preparation for possible unemployment. In fact the 'sonic' shock wave hitting the real economy in recessions that start as financial market panics (though not all or even most recessions do) is composed in part of people doing exactly that.

With that said I think it's better to be continuously prepared for unemployment (oneself, in the immediate family). But it's not a violation of *financial market* efficiency to say you can sometimes see a rise in probability of unemployment coming. Certainly that's true if you know your particular company is not doing well, a new owner is likely inclined to making cutbacks, etc. and especially if you also know your own position is viewed as relatively dispensable (which might be hard to view objectively but sometimes is fairly apparent, if you can).

But again there's no such thing IMO as timing your preparedness for *market downturns* any more than coming out ahead by timing markets generally. Some people can do that*, but the great majority can't.

*for themselves; but if they offer to do it for you for a fee the fee is likely to exceed the value they add.

User avatar
CyclingDuo
Posts: 2933
Joined: Fri Jan 06, 2017 9:07 am

Re: Prepare for Recession?

Post by CyclingDuo » Mon Aug 26, 2019 7:42 am

apple44 wrote:
Wed Aug 21, 2019 5:23 pm
There has been a lot of talk recently about the upcoming recession. The rumor is that a recession is coming in the next 12 months. So do we need to do anything to prepare for it?
All I can think of is to stack up emergency funds because if we lose jobs, it will be difficult to find a new one.
Anybody who's weathered recessions before have any wisdom to share?
Your thoughts are on the right track with regard to making sure your emergency fund is well stocked and entertaining thoughts of preparing for any potential job loss due to a cyclical economic slow down. It's a good time to keep as relevant and productive as you can at your current job while also getting everything updated with your resume, references, and profile for any job hunting if needed. Never hurts to start sniffing around and looking at potential jobs within your niche as well while currently employed.

Does your household have diversity of income with regard to your human capital? Examples include spouses working in different industries, income that comes in from a side hustle or two, etc... . Explore the concept of those with stable jobs as income that is more bond like, and those with jobs in cyclical industries being more stock like. Figure out how your household income fits into that terminology when answering the question about diversity of income with regard to your human capital.

For those of us who have weathered previous recessions, each recession can be different in terms of what is impacted.

Provided you do not lose your job(s), one thing to prepare for is taking advantage of potential deals that may or may not present themselves at or near the trough of the economic slump. Deals could possibly include things such as appliances, autos, homes, bathroom/kitchen remodels, etc... . As the home building industry slows, you can often hire contractors at lower - or perhaps very competitive rates for a remodel, or home maintenance. If the timing of repair/maintenance for your home or autos is in sync with an economic slump, take advantage of deals being offered. If an economic slump hits the consumer with regard to retail, look for deals on things you may need to replace (clothing, electronics, linens, dishes, furniture, etc...). Again, if the need to replace these items is in sync with the slump - it's a good time to take advantage of it. Likewise, if the travel industry slows and it is in sync with your annual vacation or travel plans - take advantage of any deals you can find during the slump. The same could be said if a slump impacts the rental real estate income market. Perhaps you have been saving and waiting for such a recession to invest in rental real estate during a slump (along with thousands and thousands and thousands of others 8-) ).

Recessions come and go with each one being somewhat individually unique as well as impacting all of us in a different way.

If no job loss occurs, having lived and worked through several prior recessions - our advice would be to simply continue on with your automatic contributions to all of your retirement accounts and additional savings plans (college education funds, taxable investments, vacation fund, etc....) as if nothing is out of the ordinary. A recession will come and go just as they have in the past. Do your best to not let an economic slump impact your enjoyment of life.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

User avatar
Hayden
Posts: 1290
Joined: Tue Apr 16, 2013 5:13 pm

Re: Prepare for Recession?

Post by Hayden » Mon Aug 26, 2019 11:11 am

What I do:
Work out every day - to try to protect my health
Learn something every day - to expand my skills

User avatar
Mactheriverrat
Posts: 248
Joined: Sun Nov 24, 2019 1:41 pm
Location: Works on the Mississippi River on the barges. Live's in Little Rock, AR.

Re: Prepare for Recession?

Post by Mactheriverrat » Sun Nov 24, 2019 1:57 pm

Most of the time from what I've seen is yes certain things can precede a recession. Inverted yield curve, current events , financial mess as before the great 2008 recession and so on. The talking media heads (CNBC, MSNBC, FBN) and the poor reporting these days of repeating others also adds to the silliness . Usually growing unemployment goes along the bear markets. Market corrections like the one in late 2018 as just part of the market.

A picture is worth a 1000 words.
A chart of the US Employment rate since 1980

https://stockcharts.com/h-sc/ui?s=%24%2 ... 1506658993
Everything evolves. | May Every Sunrise Bring You Hope. May Every Sunset Bring you Peace.

Topic Author
apple44
Posts: 66
Joined: Tue Feb 19, 2019 3:22 pm

Re: Prepare for Recession?

Post by apple44 » Thu Mar 12, 2020 10:16 am

Thought about this post this morning.
Well, here we are.

CardioMD
Posts: 13
Joined: Thu Feb 06, 2020 11:40 am

Re: Prepare for Recession?

Post by CardioMD » Thu Mar 12, 2020 7:05 pm

Olemiss540 wrote:
Wed Aug 21, 2019 8:25 pm
Same thing I did when they predicted (incorrectly) the last 6 recessions. Maintained a comfortable asset allocation and continued to invest every 2 weeks. My goal is to stay employable and hope I can stay greedy while others are fearful.
This is perfect.

Olemiss540
Posts: 1209
Joined: Fri Aug 18, 2017 8:46 pm

Re: Prepare for Recession?

Post by Olemiss540 » Tue Mar 24, 2020 6:58 pm

apple44 wrote:
Thu Mar 12, 2020 10:16 am
Thought about this post this morning.
Well, here we are.
And we will be here again in a few years. Probably a few years after that.

Keep your investment strategy steady so you can focus on more important things. Invest and let the long term returns flow in while you stay as employed as possible.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

michaeljc70
Posts: 6372
Joined: Thu Oct 15, 2015 3:53 pm

Re: Prepare for Recession?

Post by michaeljc70 » Wed Mar 25, 2020 8:03 am

abuss368 wrote:
Thu Aug 22, 2019 10:37 am
apple44 wrote:
Wed Aug 21, 2019 5:23 pm
There has been a lot of talk recently about the upcoming recession. The rumor is that a recession is coming in the next 12 months. So do we need to do anything to prepare for it?
All I can think of is to stack up emergency funds because if we lose jobs, it will be difficult to find a new one.
Anybody who's weathered recessions before have any wisdom to share?
There is nothing different to do. Tune out the noise. Stay the course and always add to cash, pay down debt, and continue to invest.
+1. You should always be prepared. If you are 11 years old or older you've been through one :D.

User avatar
Sandtrap
Posts: 9696
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Prepare for Recession?

Post by Sandtrap » Wed Mar 25, 2020 9:37 am

apple44 wrote:
Wed Aug 21, 2019 5:23 pm
There has been a lot of talk recently about the upcoming recession. The rumor is that a recession is coming in the next 12 months. So do we need to do anything to prepare for it?
All I can think of is to stack up emergency funds because if we lose jobs, it will be difficult to find a new one.
Anybody who's weathered recessions before have any wisdom to share?
Great question. Thanks for posting it.

1 As far as one's financials; if your portfolio and financial strategy is sound, then it should do well no matter what the economy does. If it does poorly, then it was not stragegized properly to fit your needs, financials, and temperament.

2 The size of an EF is unique to every person's life dynamic and financial dynamics and "temperament". For example: if someone looks great financially but their life is in transition or turmoil or a mess, then a larger EF is called for. IE: if one does not have job stability, then also a larger EF. Etc. Etc.

3 Minimizing debt, maximizing "net" income and income streams and so forth should be done regardless of impending recession because it is one of the paths to wealth and financial stability.

4 Maximizing one's employability and/or professional skill sets and education/certifications should also be done regardless of impending recession for the same reasons as #3

5 Prepare ahead for anything that disrupts one's spending and lifestyle.

For some: it's "cash. . . . lot's of cash. . . "
or. . .. . . if you are like "John Wick" (movie) "guns. . . . lot's of guns"

j :happy
Wiki Bogleheads Wiki: Everything You Need to Know

Post Reply