- 🔎 Market Mysteries
🔎 Market Mysteries
Should I be investing if there’s a recession?
Hey friend - welcome to the weekly deep dive into the most significant economic trends facing our lives and our planet.
Stick to the plan and prioritize your financial health. In a recession, it's essential to be even more mindful of your spending, savings, debt, and investments. The right decisions now can set you up for even greater success when the economy turns around. There are a few crucial strategies to remember.
Why might there be a recession?
For many of us, the word recession suggests a global crisis. The last two recessions were the most severe economic disasters of the last half-century. In 2008, the global financial system collapsed. In 2020, the global economy was completely shut down.
Not every recession is a financial crisis. Recessions are a natural part of the economic cycle. The economy grows, slows, and contracts. Just like all squares are rectangles, but not all rectangles are squares. We're in unprecedented times, so it's hard to say what comes next, but economists aren't really talking about an impending economic collapse.
The economy is still doing fine by most standard measures, but those measures have started to turn in the last few months. Consumers drive the economy, but high prices and borrowing costs have slowed spending. The low supply of workers relative to business demand will likely keep unemployment low, but layoffs have started rising, and it’s harder to find a job. Inequality is worsening. Even the biggest corporations have warned about a significant slowdown. If living costs come down and wages catch up, things could turn around, but it’s always best to pair optimism with preparation.
What do I focus on first?
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