With the right investment advisor in your corner, you can potentially turn the next economic recession into a positive event for your portfolio — or at least minimize the potential damage.
Economic analysts predict that the U.S. could experience another recession within two years. It’s not too soon to start thinking about this possibility and taking steps to protect your assets accordingly.
Experts Predict the Next U.S. Recession Will Arrive in mid-2020
The economic analysis experts of Moody’s Analytics predict that the next U.S. recession will strike in June of 2020.
The U.S. economic recovery from the Great Recession began in early 2010 and has persisted through 2017. After more than 105 months of expansion, a contraction now looms on the horizon, and according to many financial experts, may be unavoidable.
Some of the factors driving this prediction are political uncertainty, waning fiscal stimulus, increasing interest rates, dwindling demand, backfiring trade protectionism and a rapidly increasing national deficit.
Although it appears that we have two years to prepare, unexpected events could hasten the event. On the other hand, the U.S. government could also take action to forestall an economic crisis.
In short, no one really knows what will happen. And that’s why having an investment advisor to guide you can ensure you’re prepared, come what may.
Protecting Your Assets in Anticipation of Recession
Some of today’s investors have never suffered through the financial impact of recession. Most millennials, for example, weren’t old enough to have accumulated a portfolio during the Great Recession. However, they likely watched their parents lose some or all their accumulated wealth.
Consequently, most investors recognize the dangers that could strike at any time. But surprisingly few investors are taking steps to protect their wealth in advance of the next downturn.
When the economy is in growth mode, complacency can set in and investors can allow their expenses to gradually increase. When the economy tightens, they could find themselves without a job and no way to cover those expenses — as we saw so clearly illustrated in 2008 and 2009.
How an Investment Advisor Can Help
With the assistance of an investment advisor, you can begin financial planning that anticipates economic events and minimizes your exposure. This will help protect your accumulated wealth and keep you on track to achieve your financial goals.
The conservative approach suggests you should start managing your finances now as though a recession already began, minimizing your spending and increasing your savings and investment. Although that approach may be appropriate for some investors, it won’t be necessary for others.
The right approach for you will depend on — among other factors — your age, your financial goals, your asset distribution and your tolerance for risk. The important thing to remember is that every economic cycle is temporary, and fortunately, the experts believe that the next downturn will be neither as long nor as severe as the last one.
To learn more about how you can protect your assets and accumulated wealth, contact Divergent Wealth Advisors and schedule a consultation with one of our Certified Financial Planners™. No matter what happens with the economy, you should have a solid financial plan that you revisit and re-evaluate regularly. Contact us today to learn how an investment advisor can assist you in achieving your financial goals no matter when the next recession may strike.
DISCLAIMER: It is important to note that this information is not meant to provide investment, tax, legal or accounting advice. This material is for informational purposes only, and is not intended to provide, and should not be relied on for, investment, tax, legal or accounting advice. You should always consult your own financial planning, tax, legal and accounting advisors before engaging in any transaction.
Approved by Rick Collins, Divergent Wealth Advisors LLC, Chief Compliance Officer 5/18/2018