Random Access Memories

For those of you not following the markets (overvalued), unemployment data (Unemployment is down), government policy changes (The odds of more fiscal stimulus is almost nil), or federal monetary policy (The Fed is raising interest rates). These are all indicators point to a coming recession in the next 1-3 years.

If you want more signs they will be things like a collapse in consumer spending, a drop in housing prices, rising unemployment, and an inverted yield curve. (You can learn about that here: http://www.cnbc.com/2017/06/05/inverted-yield-curve-predicting-coming-recession-commentary.html)

We have not seen these more “certain” signs yet, and I encourage you all to look out for them. (I would love to be proven wrong, lol) I think the odds are good enough to start “digging in”.

What does all this mean for us? Well, since we see some of the signs of a train coming at us down the tunnel we can at least plan a little.

Financially, this is a good time to save. Plan for possible coming unemployment. Plan for a drop in the stock market. (Divest your retirement, especially if you are over 45) Look for a job that doesn’t come and go at the whim of consumer spending. (Jobs people always need are more stable than jobs around things considered luxuries. Like eating out or buying a new car.)

Politically, it means that come 2020 we’re going to be looking at things getting worse, not better. Which means a change in party. (For those of you with aspirations of holding political office, heh.)

This is also a really good time to sell a house if you were at all planning to within the next five years. Better to rent for awhile and buy again than to be underwater later when you want to sell.

Me? I’m going to be saving, then investing those savings in the stock market after it looks like it’s hit a low point. Often stocks get badly undervalued when the bottom drops out.

I also think my home buying plans are on hold until the coming recession bottoms out. It will be a good point to buy, especially since the Spokane area where I am is in the midst of a bubble.

Curious as to what anyone else thinks would be good planning measures.

Thanks