Friday, December 5, 2008

What to do during a recession

Surprise, surprise - people are finally admitting we're in a recession - and probably a big one at that. I've spoken to several consultants over the last few years on what to do to prepare for a recession, and have found several online articles that support what I've heard. I pass them on to the readers of this blog as there are several very good (and highly important) things to take note of:

My Key Take-aways:
  • Don't sell your investments now and stop contributing to retirement/other savings! ...if you do, you're just locking in your losses. Now is the perfect time to invest, if you're in it for the long haul (> 10 years) - providing you have emergency funds set aside and in a secure account (money market, CD, etc). No sense in investing if you don't have emergency funds. 3-6 months of living expenses is typically considered a good allocation for emergency funds.
  • Get more training/education - employers are laying off like crazy - more training and education make you a less likely candidate for layoffs, and a more likley candidate for hiring if you do find yourself unemployed.
  • Be patient. Don't succomb to the media hype. History has shown that those who don't have knee-jerk reactions to the world around them typically do better. Keep working hard at your goals/plans and stick to your principles.

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