Local financial advisers say protect your savings amidst talk of recession

Local News

Top economists are projecting the U.S. could be headed toward a recession by the end of next year.

President Trump has rejected those claims but is making plans to avoid an economic downslide.

In the midst of the recession conversation, many are wondering how they can protect their savings in an unsteady market.

“I think the word ‘recession’ is a word that’s inappropriate,” President Trump said earlier this week. “We are very far from a recession.”

But experts are saying the opposite.

74% of economists who took a recent National Association for Business Economics Survey said they thought there would be a recession by the end of 2021.

Dean Listle, Secure Retirement Solutions co-owner, defines a recession as two consecutive quarters when gross domestic product and spending decreases.

He says it’s difficult to predict what will happen to savings like your 401(k).

“When it comes your 401(k) and your investments, in 30 years since the 1930s through 2017, we had about 10 recessions. About half of those, the stock market was up, half of them it was down,” says Listle. “A recession doesn’t necessarily mean that the stock or the investment world goes down, typically consumer spending does.”

If you want to prepare and protect your investments there are things you can do.

“Look at short term bond positions,” says Listle. “Bonds have been stressed here for the last for five years, but the shorter the term, the less volatility. For your 401(k) try to get all large-cap. If you want to get a little bit more defensive then put some bond positions in there that are short term bonds.”

Listle says the silver lining of a recession is that it resets the market to grow again.

But it’s best to think twice about your finances.

“Don’t let your emotions dictate some of your financial decisions, that’s one of the biggest mistakes out there,” says Listle. “People see and hear that there’s going to be a recession so they start selling off and moving into cash. You may have just sold a wonderful investment that takes you through a recession every time.”

Listle says the closer you are to reitirement the less your financial portfolio will be able to withstand too many bad hits so if you’re over the age of 50 he says to talk to your advisor or employer about possible defensive positions to add to your portfolio.

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