It is normal to have ups and downs in the economic cycle of any country, with periods of growth and expansion followed by periods of recession and downturn. However, depending on a person's situation and his or her personal financial goals, having a recession in the economy or a pullback in the market could spell significant disaster.
With recent changes in the financial climate of the United States, many people are wondering if a recession is coming in 2020. Since it is not possible to know whether this is the case, preparing for the unknown can be the best choice for anyone who wants to protect their financial future.
Making a checklist for recession preparedness is the first step. This is a review of all areas of a person's financial situation and is constructed in a point-by-point method that will make sure everything is covered. By creating that kind of checklist, all areas of debts and assets are addressed. These areas can be brought into the best possible shape, in order to make a downturn in the economy less damaging. While it may not be possible to completely eliminate the risk of some financial loss during a significant recession, it is far easier to reduce the strength of that damage when all areas of asset and debt are properly handled.
There are a number of elements that could be included in the checklist, such as:
- Completing and revising a financial plan to identify risk exposure
- Understanding how taking money out of a portfolio in a down market can affect your plan
- Establishing – or increasing – an emergency fund
- Considering strategic refinancing of debt
- Determining ways to protect gains on aggressive assets
- Analyzing your current investment risk tolerance
One of the ways people can do that more easily is to pay down their debt preemptively. That will help them survive longer when it comes to their finances, even if they lose their job or their hours are reduced.
Having the right financial help and guidance is important, too. Central Coast Wealth Management, located at 1104 Palm Street in San Luis Obispo, California, is an expert in the financial management field and is ready to help all of its clients prepare for the possibility of a recession based on their personal goals and specific situations. Working with Central Coast Wealth Management can mean the difference between surviving an economic downturn and severely damaging what could have been a strong and recoverable financial future. They can be contacted by phone at 805-439-0370 or by filling out a brief questionnaire online.
The Financial Professionals of Central Coast Wealth Management are Registered Representatives, and Investment Adviser Representatives with/and offer securities and advisory services through Commonwealth Financial Network® Member FINRA/SIPC, a Registered Investment Adviser.