Find out exactly what to do in the face of a downturn, learn why market timing is a loser’s game, and pick up our tips on how to recession-proof your life.
There has been a lot of talk and media coverage around the question of, “is this the next recession?”
There’s a lot of implication that it’s this big, looming thing that’s about to happen — and we’re all totally screwed when it does.
But this is an emotionally-charged takeaway, to say the least. Is it true? To figure out what to make of recent headlines and recession fears, we take a step back in this episode to 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
What we do know is:
- 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
In this show, we look at both what we know — and what we don’t — and explain what you should make of each so you can feel confident about your investments, your finances, and what to do if a recession strikes tomorrow (or in a few years).
Jump into the episode here:
Further Reading & Resources
- Most investors thought 2018 was the peak year for stocks, CNN reported. (It wasn’t.)
- Learn what typical market cycles look like and how long they last with data from the National Bureau of Economic Research.
- Everyone sucks as predicting recessions. Even world-class economists, as this study from the International Monetary Fund shows.
- Meet Bob, the World’s Worst Market Timer, and learn that he STILL ended up a millionare even though he only invested right before dips in the market. Secret to his success? He never sold and went to cash. It’s about time IN the market, people!
- And then let Bo and Brian, hosts of The Money Guy Show, explain why Bob should have never messed with market timing anyway and stuck with dollar cost averaging to have 4 times the amount of money in his nest egg.
- Wanna get nerdy? Get some of the charts and graphs Eric referenced throughout this episode below 👇🏼
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