Is This the Next Recession? What to Know (and Do) About It
It would be hard to miss all the media coverage that's been going around lately about "the next recession." It seems that the implication is that a potential recession is this big, looming thing that's about to happen ... and we're all in big trouble when it finally strikes.
But most headlines present an emotionally charged take on this topic, which doesn't benefit you as an investor who wants to grow and keep wealth. So let's take a step back from all the noise and the emotion-driven conversations and focus on a few key facts:
- We don't know with certainty when the next recession will start.
- We don't know exactly how much it might impact the market or economy.
- We don't know precisely when it will end and a new expansion will begin.
Looking at that, you might feel like I'm suggesting we don't know much. That's not too far from the truth! When it comes to predicting what's next in financial markets, they are just that: predictions. Guesses. Unknowns.
What we do know is that:
- Recessions are normal parts of market cycles and should be expected.
- Market volatility is also normal, and also to be expected.
- Market timing doesn't work ... but investing for the long term with a diversified portfolio appropriately allocated to your goals, needs, and time horizon can work very well.
How can this information help you? You can to ground yourself in reality and then make better, more informed, and reason-driven decisions around what to do with your investments when a recession seems imminent.
