By: Gigi G. LeKites, CFP®, CRPC®
Inflation is up, the market is down and now there’s talk about a recession! Just the idea of a recession makes the calmest person sweat. And what if a recession is coming? Is there something we should be doing to prepare?
Yes, there are a few things you can do to prepare for a recession. However, first things first: don’t let it steal your joy!
First, what is a recession?
The National Bureau of Economic Research defines recession as two consecutive quarters of decline in real GDP. What that means is that there is a slowed production of goods and services for six months. And while a recession is a “four-letter word”, it really is a natural economic cycle. In fact, there have been thirteen recessions averaging 10 months since World War II, including the COVID-19 Recession. Learn more about prior recessions by clicking here.
What should you do to prepare for a recession?
It’s always good to be prepared, but right now is a good time to take inventory of where you are financially.
You don’t have to wait for a pending recession to put your finances in order, but the current economic environment is a good reminder that it’s a good time to start preparing today.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
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