More and more headlines are declaring a recession is due in 2020. But what even causes a recesssion? And if a recession was so bad, why would someone like Warren Buffet say he "hopes to see more recessions"? And more importantly: what can YOU do during a recession to come out on top?
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RULES OF A RECESSION.
A country is often described to be in a 'recession' when its GDP has been declining for 6 months in a row (although sometimes this definition varies depending on who you ask).
With that being said, there are some important rules to keep in mind if you want to profit from a recession. The first rule being: nobody can time the market. No matter what, nobody knows WHEN is the next recession.
But once a recession does hit, it’s important to not panic and start selling all your assets, because one thing is for sure: the market will always bounce back. But since the market is always shrinking and expanding, that also means that the market will always eventually crash.
HOW TO PREPARE FOR A RECESSION…
Preparing for a recession is perhaps the most important part of this whole game. It’s very important that you start to save up money, build capital, avoid debt, and build a healthy credit score. You want to make sure that you have all the resources ready to make the most from that economic collapse. There’s nothing worse than seeing so many opportunities in-front of you, but no ways to take advantage of them.
WHAT HAPPENS DURING A MARKET CRASH?
When an economies market crashes (for whatever reason) one can expect an increase in unemployment levels, business bankruptcy, and three very important things to rise: death, divorce, defaults.
HOW TO INVEST DURING A RECESSION?
When the market crashes, people become desperate to sell their assets like shares, and real estate. And the more motivated someone is to sell something, the likelier they are to sell it for cheaper.
That’s where you come in.
If you’ve prepared for the recession properly, then you should have a good amount of capital saved up and ready to invest back into the economy. Why invest back into the economy? Remember: the market will always bounce back. And everything is on a discount during a recession. That means you get to buy assets for way below market value, and then sell those very assets once the market bounces right back up – which it always will.
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