Oil prices have been surging. Housing markets have been dropping. Interest rates keep getting cut by the Fed in order to help curb the negative effects of possible recession. What happens if all of the current economic activity sends the US into an economic recession? Would you be prepared? Included in this article are several helpful tips and advice on ways to potentially avoid some of the pitfalls that occur as a result of a recession. But, as we all know, a recession is something that no one can ever be completely prepared for as it effects nearly everything that has anything to do with finance. That is, except for the few local towns that seem unaffected by the US economy, which is unusually rare.

Let’s say you are not an individual living in one of the local communities seemingly on a different route than the rest of the country such as the state of Idaho, which, in the government’s recent state-by-state GDP data, Idaho showed a 7.5% growth in GDP last year. How will you know when to be prepared? The answer is actually rather vague as no one can really predict precisely when and even if a recession will take place. In fact, many times we don’t even realize we are even in one until it has already set in. this uncertainty is exactly the reason why families and individuals should begin saving money today. Not a whole lot, but just enough money to get everyone through a good 6 months or so in case there should ever be any illness or job losses during these times, or any time in that matter.

Currently, in California one of the unions will be going on strike soon and everyone in the industry will soon be unable to work. What alternatives do they have, right? The suggestions I have heard right now in reference to those in need to financial advice are told: “make sure you have at least 6 months of money supply saved up.” Ok. That would be great, but, they just realized they were going to strike a couple of days ago. Now what? Damage control. This could all be prevented if the unprepared ones put together some sort of recession plan leading with a nest-egg of savings just to help stay afloat. This is obviously one of the most important factors. But, what if you are so strapped that it is nearly impossible to save that much at this time?

There are several other things a person can do in order to prepare for a downturn in the economy or industry. One very useful thing to do is to always keep your resume fresh. You really never know when you will need it. Also, try to always keep an eye on the job market even when you are indeed employed. Just this knowledge alone will help you find a job for yourself if the need ever should arise. In addition, this information will be extremely helpful to those just entering the industry or friends who need a hand in finding a job. This will only help you in the future if and when you should ever need a big favor from them. I have seen this situation occur many times in my industry and it is quite amazing what a little help towards others will do for your career. If you are investing currently, maybe consider taking some of the funds out of the stock market and into something like bonds. The reason is that bonds have always performed much better than stocks during a recessions in the past. This can be attributed to the lower amount of funds being borrowed during a recession leading to lower interest rates. And with lower interest rates come higher bond prices.

As I mentioned earlier, predicting a recession has always been a hazy subject. No one really knows if and when one will actually hit. This is why we all need to prepare for such occurrences. These days it seems to be quite a challenge to keep everything stable for a long period of time and keeping the things in this article in mind when considering options will help prevent the need for damage control if the event should ever arise. If you decide to get into more investment tools such as bonds and annuities, make sure you know all of the facts involved before paying any money. Many cases show that you could be paying the company much more than you think when you have money in such tools as annuities. Always do your research and compare all the different plans. The salesmen know all about them, so why shouldn’t you if it is your money going into owning them? So, always know your facts when planning for the future and try to become even more prepared than you were the day before even if it just means knowing what jobs are out there and keeping in the ‘loop’. Planting seeds will always eventually result in a harvest. For more information on Preparing for Recession, please visit http://www.SquarePeak.com.



By: S. Michael Windsor

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Justin asked:


Are we in a recession? If I remember correctly from my college economics class there is a precise definition to a recession. Something like multiple quarters without growth.

It seems to me this should be a simple answer. There was either growth for the required time or there was not. Why are some people saying that we are in a recession and some are saying that we are not?

Does anyone know what the definition of a recession is and have the numbers to back it either way?

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Instantpainrelief2008 asked:


During a recession, gas price goes down because people drive less. The cost of consumer goods also goes down because the cost of transportating those goods is less, and because people spend less money and buy less. This makes consumer goods more affordable for poor people who still have jobs. Agree or disagree?

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moira77 asked:


I keep seeing news about the fact that a recession may be coming. I am curious as to how this affects a normal person, not involved with the stock market etc. For instance, will prices go up for food, clothing, etc? Are there any ways to prepare for a recession? Any ways to benefit from a recession?

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William Hoffman asked:


I am looking to see how the technology sector performed after the last recession and inparticulary after the last housing recession. Thank you.

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In our investment work when we get involved in stock investing, we do hands on stock research. Here are 12 basic stock investing rules that you may follow for successful trading. The stock market is driven by earnings, and a good stock investing course will teach you to judge the emotional state of the stock market.

Basic concept behind stock investing before getting involved in the stock trading, you should be well versed with its concept as this will help you in achieving success every time you trade. Now with all these information presented to you, it is now your choice whether you will get involved in penny stock investing. With ETF investing, you get the best of stock investing (ease of trading) and the best of mutual fund investing (built-in diversification) all in one investment vehicle.

When taking a stock investing course you may learn a few things that your broker may not even be aware of. Unlike stock investing, you need strong credit to use other people’s money to finance investment property. As you might imagine, the ads under stocks generally (which includes broad search terms like ’stock investing’) are seen the most, because most searchers begin with generic inquiries.

So if you are new to investing in the stock market take some time and learn how to by taking a stock investing course. Stock investing is relatively volatile and full of uncertainty. The more forex stock investing trades you make with a high probability of success, the more successful you will be.

Stock investing takes a great deal of research however if you make good investing decisions, it can have a high rate of return. Stock investing is a popular tool that many use for creating wealth. It is not difficult at all to succeed in stock investing.

They don’t know anything about stock investing and they often lose a few thousand dollars very quickly. You have to weigh both the pros and the cons of small cap stock investing before you sink any of your hard earned money into anything. In the real world, the world of stock investing, you should always put money after your best ideas.

It is also the hardest part to master in stock investing. Penny stock investing is a junior level course at least. Fraudsters don’t think twice before developing stock investing, commodity or option trading courses to make a little extra money for themselves regardless of whether or not what they teach helps their students.

Also, online stock investing has opened the door wide for overseas stock trading, giving you more investment opportunities than ever. In this manner, stock investing is much like surfing: spotting when or when not to ride the waves. So, before putting any money into stocks, the first question you should ask is what do you want to achieve with stock investing.

The second richest man in the world, Warren Buffett, has made his millions from stock investing. Social networking has been intergraded into many stock investing courses. When you take a closer look, the alternative means of extra income via stock investing is just a spin-off of earning from a business.

Online stock investing has helped a lot in saving time and money by enjoying the thrill of trade at your convenience in the ambience of your home. What any ‘vexed’ shareholders are forgetting, and he is not, is that Rule 1 in stock investing is, don’t lose money. Penny stock investing can be profitable.



By: Uchenna Ani-Okoye

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toucansam456 asked:


The last time the US was in a recession, as I remember as a young child was in the early 90’s under the first Bush. I don’t understand how exactly a recession affects the economy, and how it differs from a depression.

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Why could the U.S. be heading into a recession? The most likely reason is the housing market- a multi-faceted subject. There’s the new home building sector.

It’s important because it employs so many people, not just in construction but, by extension, in the industries that supply materials to the homebuilders - lumber, concrete, appliances, and even retailers like Home Depot.

Think about all the “stuff” that goes into a home and how much you buy when you move. A slowdown (or collapse) in new home building has a ripple effect throughout the economy and could drive up the unemployment rate.

Housing market problems are not limited to new home sales. The value of your home and the market for sales of existing homes is falling. By how much and for how long is the big question. But the problem here is the equity we have in our homes is evaporating.

Even worse, those of us who have recently purchased homes or have taken money out of our homes, through refinancing or home equity loans, may have no equity left. A reduction in home values reduces homeowners net worth, causing them to pull back on spending.

The mortgage market mess is the last, but the not least, of the housing market issues. The big problem is not subprime mortgages, it’s adjustable rate mortgages. Bumps in mortgage payments due to contractual provisions or an increase due to a rising LIBOR rate - most mortgages are tied to this rate and it may rise even if interest rates fall in the U.S. - will force consumers to cut back spending in other areas. Lastly, will more stringent lending standards exacerbate the new home construction and/or existing home value problems?

There are other economic concerns as well - consumer spending (beyond the impact of the housing market), rising energy prices, the U.S. balance of trade deficit (are jobs being exported as a result?) So, if you’re concerned about the possibility of a recession, and who shouldn’t be, how do you invest?

The stock market, according to classical wisdom (or folklore) anticipates a recession by six to nine months. Since it’s currently at record highs (at least the Dow and S&P) this suggests a recession is not in the offing. But the market could change direction at any time. There’s a saying that the stock market has predicted ten of the last five recessions.

So maybe it’s not such a perfect predictor after all. The stock market also anticipates economic recoveries. Add to the mix the psychological difficulty of investing in stocks when things are the bleakest (the best time to buy) and it demonstrates the difficulty (impossibility, for most of us) of trying to time the market.

Most investors should be in the stock market to take advantage of growth in principal value and income which comes through the long term ownership of equities. Stocks which do best in recessions are those of the strongest companies and companies whose products consumers must keeping buying (think toilet paper not cars).

The stocks to focus on are big cap companies, consumer staple products and health care. There’s an overlap between many big cap stocks and consumer staples and health care companies. I’d also add to this list companies with significant international sales. (Did you know that a majority of McDonald’s, and many other U.S. companies, sales are overseas?) There’s also a substantial overlap between big cap and international sales. You can find many good mutual funds which focus on these areas.

Will this investment strategy provide a positive return during a recession? Not necessarily but it will keep you in the stock market with a minimum amount of risk and the long term investor will be well positioned if there is no recession or for the upturn in stocks after the recession occurs.

What about bonds, you ask. Don’t they do well during a recession? Yes, if interest rates decline as a result, but that may be occurring just when stocks are beginning to rally again.

With long term U.S. Treasuries yielding below 5% (some good money market accounts have higher yields) how much lower can interest rates go, so how much higher could bond prices go? Focus your risk-taking investments on the stock market and keep the rest of your capital in cash.



By: Bill Byrnes

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