Based on the thoughts of Ben Stein and Myself
1. Keep investing in the market:
History has proven that investing during recessions has paid off well. In fact it is one of the best times to invest for the long term. Keeping a little more that normal in cash and adding a little gold to the portfolio will help you sleep a little better as well. The reason the market pays more than other forms of investment is because of these fluctuations
2. Don’t sell your home right now:
Again, history tells us that a peak in housing leads to a fall which eventually leads to a another peak higher than the first. Our problem right now is not knowing how far it could fall. Don’t even think about flipping your house right now. Concentrate of fixing up your present home so when the market turns your house is an easy sell. Housing cycles tend to be long so we could be looking at a bad market for 5 years.
3. Work extra hard at your job:
There WILL be layoffs. Make sure you aren’t one of them. Take your job seriously or you may not have it. I like to be the first one in and the last one to leave. Family is important but if you don’t give your all at work you’ll get to spend all day with them
4. Buy a little Energy
Invest a small portion of your portfolio in something like an energy index fund such as XLE. Many think high energy cost is the major cause of this recession. You might as well hedge it.
5. Keep an eye on your future
Don’t be affected by day to day stock prices. Use the lower prices to get in cheaper. If it is lower next investment time, buy more. Selling because the stock price is too high or too low is for the foolish. You only buy or sell based on fundamentals when you are investing long term.
6. Don’t Panic
Post WWII recessions have lasted an average of 15 months from peak to peak. Yes this an average and every recession is different but don’t let the media scare you. Things are not rosy but it’s never as bad as everyone says. Calm, consistent investment during a dropping stock market always pays off.
7. Travel within the United States: Don’t Even Think About Going to Europe
If you want to pay $25 for a cup of coffee in France then go ahead, otherwise keep your vacation to somewhere that is on the dollar.