The world has taken a battering over the last few years. The covid pandemic ran riot and devastated businesses. Countries racked up debt around the world and ordinary people had to dip into any savings to get by. Now that the world has started back up and things are moving, we have been struck by a war in Ukraine driving global oil and gas prices through the roof. Interest rates are rising and the cost of living crisis due to high inflation is hitting folks in the pocketbook.
This has caused experts to start talking about the warning signs of a potential economic downturn. The Wall Street Journal reported that a year ago just 13 percent of economists believed there would be a recession. This year after surveying economists they reported that a whopping 28 percent of them are now predicting the American economy will fall into a recession sometime in the next year.
They aren’t the only ones predicting a recession either. Deutsche Bank said in a report to clients that a "major recession" is coming to the U.S. economy and CNN reported that the "coming recession will be worse than expected.” Reuters released research that found one in four economists believe the U.S. will experience a recession this year. They say that that number will rise to a startling 40 percent over the next two years.
Worrying about your finances can take up a lot of energy. If you are worried about your retirement or your financial security in the future, the fact that so many experts are saying that we should expect a recession will cause more worry and perhaps even panic.
Scott Ente, Senior Vice President, Investments for David Lerner Associates said, “The one thing you absolutely should not do is panic. Get advice from a trusted and reputable financial advisor. Cutting corners by not contributing to your 401(k) or retirement accounts is not a good idea. Avoid taking out cash early to pay bills, or you could face pricey penalties. Don’t rush into something because you are afraid of what the future holds. Planning carefully with the sensible middle ground of investing is the way to go. “
Everyone has a unique financial situation. However, a recession will affect everyone. Folks should feel empowered to take control of their own lives and financial freedom. Action and confront rather than inaction and fear is a better way to deal with a looming recession.
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