Many economists say the United States will fall into a recession next year, according to a new poll by the Financial Times and the University of Chicago’s Booth School of Business. Indeed, 70% of the 49 economists polled said they thought we’d declare a recession in 2023. Of course, whether or not those concerns prove to be correct remains to be seen, but if you want to prepare for that possibility, here’s what the pros say to do.
Don’t derail your long-term plans because of fear
It’s important not to let fear wreck your long-term investment strategy, pros say. It has taken the S&P 500 only 4 months, on average, to recoup losses from the 23 market corrections (declines of 10% to 20%) since World War II, and 14 months, on average, following the 10 “garden variety” bear markets (declines of 20% to 40%) during that same time period, according to data compiled by Sam Stovall, chief investment strategist at CFRA Research. “If you are a nervous Nelly, then simply remind yourself of the speed with which it’s taken for the market to get back to break even,” says Stovall.
Warren Buffett himself emphasizes the importance of investing for the long term and trying not to time the market, at least for most investors. “Don’t watch the market closely,” Buffett told CNBC back in 2016. “If they’re trying to buy and sell stocks, and worry when they go down a little bit … and think they should maybe sell them when they go up, they’re not going to have very good…