Recess is the root of recession, but recession isn't as fun as recess

Written by
Peter Dunn

If you are like me, then you can read. I read earlier this week that Goldman Sachs thinks that we are heading towards a recession. By we, I mean our country. Let's discuss.

First what is a recession?

A recession is a pull back in the economy. It usually means that the Gross Domestic Product (GDP) declines and there is usually negative economic growth. Much like my hairline, a recession, simply means that thinks are going the wrong way, backward.

Should I care?

Caring and awareness are different. You should be aware of how it affect you, but I don't really think you should care. You can't do anything about it (much like my hairline).

What if the recession lasts a while?

Then it is called a depression. Then things get a little depre.... sad. A depression is when a recession goes longer than a few economic quarters. Usually energy costs are super high, interest bearing accounts are really low, and no one wants to do anything but sit on their money.

Will this affect my investments?

Of course it will. Whether you are in CDs or in the stock market, it will affect you. But, you simply need to examine your goals. If you have mid or long term goals with your assets then you really shouldn't do anything different. You don't want to be out of the market when it heads back up. If anything, continue to invest. It will lower your cost basis. Always ask your financial planner what they are personally doing with their money. I may not be your advisor, but I am investing more than I usually do right now. I realize that the market is pointing slightly down. The further it goes south, the more I am investing.

Pete, why did you always end up missing part of recess in elementary school?

My answer is simple. I needed the teachers to feel like they were doing their job. I felt as though I was keeping them company as I stood facing the wall. Okay. You don't believe me.

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