By: Real America News Updated 02 May 2022, 16: 56 pm EDT
The fears that began last week about the possible start of a recession in the coming months, after the US economy contracted at an annual rate of 1.4%, have echoed among US consumers.
These The warnings have not surprised experts, due to the number of external and internal events in the economy current.
Events such as the war in Ukraine, the drive by the Federal Reserve to raise interest rates and combat the high inflation, as well as shortages in the supply chain, could cause negative effects in consumer finances.
However, there are several ways to assess the situation and protect your pockets against possible losses:
1. Don’t change jobs for now
Low unemployment rates and vacancy announcements everywhere It would seem that it is a good idea to change jobs for a better salary. However, if there is a recession, that could change quickly.
For now a better option would be put down roots in your current job and try to grow there.
two. Have money reserved for unforeseen events
A reserve of cash savings is crucial when people face situations beyond their control, such as massive layoffs, which tend to increase in times of economic recession.
That means having enough money set aside in cash, money market funds, or short-term fixed income instruments to cover several months of living expenses, emergencies, or any large anticipated expenses.
3. Don’t make sweeping changes in times of uncertainty
Flash news reports about rising energy and food prices or talk of a possible world war or nuclear attack is baffling. But it is not reason enough to make radical changes.
“Making a radical change in the midst of all this uncertainty is usually a difficult decision. from which you will regret it,” he told CNN Don Bennyhoff , chief investment officer at Liberty Wealth Advisors and former investment strategist at Vanguard.
4. Take advantage of the housing boom
If you have in mind to sell your house, this could be the time to do it. The housing market has been on the upswing, with year-on-year prices rising by 16.8% in February, according to the latest S&P CoreLogic Case-Shiller home price report.
But mortgage rates are also rising, which may dampen demand.
5. Check your risk tolerance
If you have money invested, it’s easy to say you have a high risk tolerance when stocks are at their lowest. clouds. But you must be able to withstand the volatility that inevitably comes with investing over time.
If a recession looms, there is still time to review and make sure your position still aligns with your risk tolerance for a potentially more difficult road ahead.
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