Did you buy gallons of water?

Do you remember 1999? I hope so. It wasn't that long ago. Did you buy a bunch of supplies? Water, canned goods, flashlights, short wave radio? I didn't, but still felt prepared for whatever the year 2000 had to offer. People were frightened by the Y2K bug. It is slightly laughable now, but it was scary then. Many people overreacted, and many people under-reacted. But all parties were fine.

I bring this up because you are going to hear, read, and see a tremendous amount about our economy in the next couple of months. The NY Times this weekend all but put us smack dab in the middle of a recession. It is scary. I felt uneasy after having read the article. Your first reaction is one of evaluation. Should you do anything different? Should you move your investments? I know I talked about recession last week, but believe me. This is just the tip of the iceberg.

Here is my super simple recession survival guide.

1. A flashlight. (I don't know why. It just seems like it should be on a survival list)

1. Make sure you have a three tiered savings and investment plan. Short term savings in a savings account or money market. Mid-term savings in balanced mutual funds (nothing risky). And finally your retirement savings in a properly allocated portfolio. You need all three. This is also the time that some people find out that their is a downside to aggressive investing. Yes, 38% returns have been nice, but there is a downside.

1. Don't panic and sell. If retirement is close, or if you need your money for a house or something, then consider moving some to cash. People who are 6 or more years from retirement, just relax. The market will find its way back up.

1. This is a good time to work on controlled spending.

1. Don't listed to the media. They are just trying to scare you. They just want you to watch their show. We have been through this before, and we will go through this again.

1. Freeze-dried ice cream.

1. Be weary of a do-it-yourself stock portfolio. This is not a time for amateur stock picking.

This post isn't meant to scare you. It is simply meant to relax you. Don't do anything drastic, and seek professional advice if you are unsure what to do. Remember there is no reason for 95% of you to freak out. The other 5% should have freaked out a long time ago because they were doing the wrong things anyway.