This is my recession and investing plan for 2020, and some of the strategies you could use, as well, to come out ahead – Enjoy! Add me on Instagram: GPStephan
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This is a funny little picture I found on Reddit that sums up the mass investor psychology so perfectly, that’s way too common:
If you want my recommendation on what to do through all of this…and, also…what I’m personally going to be doing…it’s just this:
FIRST: ONLY INVEST LONG TERM
I only recommend investing money that you won’t need for at LEAST the next 5 years, and preferably, at least the next 10 years. A 20 year holding period of the SP500 has never ONCE produced a negative result.
SECOND: INVEST CONSISTENTLY
Do not do ANYTHING differently when the market drops in price, and just carry on as usual. Don’t go dumping everything you possibly have into the markets…unless that was your strategy from the very beginning…and, instead, just continue buying in at normal intervals.
THIRD: HAVE AN EMERGENCY FUND
Ideally, this is the money you have saved up that’s equivalent to 3-6 months of your expenses…and this going to be what you can fall back on, in the event you lose your job, your income slows down, or if…one day…we figure out that pigs can fly. Trust me, having money saved up – in cash – takes all the pressure off being worried about how your investments are doing, and knowing you have something to fall back on is worth the peace of mind.
FOURTH: DIVERSIFY YOUR INVESTMENTS
If you personally can’t handle a 15% drop in prices without panicking…then, maybe, you’re invested too aggressively. If you’re completely in US equities stocks, look into adding international stocks and bonds into the mix. Or, look into eventually investing in real estate, where property values tend to be a little more stable. Keep enough cash on the side to make you comfortable, because the most important piece of advice is just to hold long term.
FIFTH: REDUCE YOUR SPENDING
Seriously, I know this isn’t investment related…but…this is so important. If you’re able to cut back on spending right now, you can apply more money towards paying down high interest debt, reducing your overhead, and putting more money in stocks while they’re down.
This is my exact plan for investing moving forward…and I don’t intend to change a single thing that what I’ve already been doing. The stock market does not change that.
So, there are my thoughts on the whole situation, and what my plan is, as well…I’m not doing anything differently, I’m not concerned, I’m not worried, and nothing changes. I know this might have been a bit repetitive, but I think it’s important to constantly be reminded that everything is ok…and to smash the like button.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
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