Some Thoughts On How To Capitalize On A Recession

I’m not sure if you’ve seen the news, but lately everyone is talking about “The R Word”

That’s right, Recession. The financial equivalent to the boogey-man.

I’m not here to speculate on how long it will last, or bad it will be. I don’t find that to be a good use of our most important resource, time.

Instead, let’s focus on the important part, the things that you can control.

So how do you not only prepare for, but potentially capitalize on a recession?

Here’s a few thoughts:

1.??????DON’T watch the market every day. You’ve got better things to do with your life than stare at your accounts. Reconnect with friends, go on a date with your spouse, pick up that hobby you’ve been meaning to try. I recommend pickleball or something that gets you outdoors and moving.

2.??????DO focus on your skill set, and be really good at what you do for a living. Job security keeps your cash flow alive, and cash flow is the only way to stay in the fight. Now might be a great time to work on a certification or continuing education piece you’ve been meaning to tackle, or pick up an entirely new skill to compliment your current set.

3.??????DON’T take on a lot of new debt. As the economy continues to work through this cycle, be very cautious around taking on new large liabilities. This goes back to budgeting and ensuring you can absorb the new payments while still saving, investing, and keeping a solid monthly buffer, for monthly purchases you may have forgotten about (here’s looking at you, Disney+).

4.??????DO update your budget. Inflation has affected everyone this year, and now is a great time to adjust monthly spending accordingly. Remember that budgets and diets fail for the same reason – small adjustments over time lead to meaningful change.

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5.??????DON’T try to time the market perfectly. There is a very very very high possibility that your investment accounts will lose money in the next few months. That is okay for long term investors – remember why you are investing, and that purchasing at lower prices allows you to buy more shares every time you buy. If you need the money in the immediate future, think about where you want to store it as there may be more appropriate options.

6.??????DO check on cash reserves. Everyone says they’re going to “wait until the fat pitch” to put money in the market, but that’s difficult when you don’t have the dry powder. Remember the rule of thumb is 3-6 months of expenses, it wouldn’t be the worst idea to keep a bit more on hand to deploy when opportunity presents itself.

7.??????DON’T panic and make an emotional decision. One of the worst things an investor can do is get scared and move all their money to cash once they’ve reached peak pain. Time and time again, this has been shown to be an awful decision for the average investor.

8.??????DO Be courageous. It’s so easy right now to let the news scare you. As soon as the R word comes up, almost every news channel starts to scream fear into your mind and heart. Don’t fall for it. Pessimists sound smart, optimists make money.

BONUS DO! Ask for help when you need it. My team is here to help you navigate these waters. There is so much opportunity coming up in the next year, we would love to help you take advantage of it and design durable plans to achieve your goals and dreams.

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.?This information should not be relied upon by the reader as research or investment advice regarding any funds or stocks in particular, nor should it be construed as a recommendation to purchase or sell a security.?Past performance is no guarantee of future results.?Investments will fluctuate and when redeemed may be worth more or less than when originally invested.

4797158 DOFU 6/2022