When you turn on the news, there’s constant talk about doom and gloom. President Trump tweeted this, the stock market did that, blah, blah, blah. One of the most popular questions that people are asking is,
“When will the next recession occur?”
Rather than focus on the negative, here are a few positive things about why recessions are good:
1. Recessions are Normal.
In order to make sure our economy doesn’t grow too quickly, recessions are a way for us to pull back to keep the future of our country stable. It’s a lot easier to fix a meal that is undercooked rather than one that is overcooked, and recessions work the same way.
2. From 1945 until 2001, The Average Recession Lasted Only 10 Months.
Recessions don’t last forever, and the 2008 Recession was an abnormality lasting 1.5 years. So, when things start going down in value, remember to tell yourself that this won’t last forever. That’s why it’s important to stick to your original game plan and to “buy low, sell high”
Investing in well-established dividend-paying companies helps because you can still collect money from your dividends even if investments are going down in value.
3. When Will the Next Recession Occur?
Most likely, it appears that we’re in the clear for 2019, and being that 2020 is an election year, the chances are high, but not definite. For now, realize that we’ve done extremely well over the past decade and make sure that you’re prepared for what the future holds.
If you’re someone who is scared of risk, maybe it’s time to start putting the contributions that you are putting away in your 401(k) into a Stable Value Fund so that you can start building up your cash.
“Cash is King”