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Possible Recession?
Old 06-10-2006, 04:26 AM   #1
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Possible Recession?

Hey, as we are all hearing from the financial media some are looking for a recession soon. What are your thoughts on this and how does who is ER ride the thing out. If we do se the big R how long, could it possibly last and what is the average length or a recession. Sorry, about all the questions but I know there are some intelligent answers out there. Might as well plan for the worst and hope for the best.

Bob
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Re: Possible Recession?
Old 06-10-2006, 04:48 AM   #2
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Re: Possible Recession?

the financial press has predicted* 12* of the last 2 recessions........i would say just have a diversified portfolio,a long term view and dont worry....we have had very few recessions...we have none of the signs of a recession looming and are probley looking at a slow down but not a recession...keep extra cash on hand to rebalance at some point if prices go lower and enjoy the recovery.......
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Re: Possible Recession?
Old 06-10-2006, 05:04 AM   #3
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Re: Possible Recession?

Sounds like sound advice. Thanks Bob
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Re: Possible Recession?
Old 06-10-2006, 06:39 AM   #4
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Re: Possible Recession?

harry browne had his bullet proof portfolio for covering all the bases..i had done it many many years ago but the heavy gold position really weighed it down and so i abandoned it..little did i know years later if i just kept rebalancing every year how well it would have done...it consists of 4 very simple but volatile investment catagories..each by itself is more volatile than you would ever want but as a pkg they work well...

25% in money market ,cd,s
25% in long term treasuries 30yr
25% in fully invested all the time mutual funds,no hedging or market timing
25% gold bullion,no stocks
* rebalance portfolio once a year
* *boring but works well.....its not about getting richer,its about not getting poorer
no matter how bad a scenerio got each catagory was positioned to respond big time.each catagory could only go to zero but the winners could double triple etc......

ironically the only situation it couldnt handle well is like now where everything is down,but this is always short term eventually leading to 1 of the 4 economic scenerios
inflation
recession
prospertity
deflation
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Re: Possible Recession?
Old 06-11-2006, 03:04 PM   #5
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Re: Possible Recession?

I suspect that a recession would hit three groups harder than others: those who are working in noncontract lower than median income jobs (they've already been hit harder by gasoline/transportation and winter utility costs, as well as health care and food, as these form a larger % of their net income), those who are living on SS or pension (with or without any PT work) of less than say $14k yearly, and those whose income comes mainly from stock/bond/other interest income.
I'm probably closest to the second category, and am enlarging the vegetable garden this year, getting a few more fruit trees etc. Any extra produce that I don't choose to freeze/can/dehydrate for myself for winter use will always be welcome at a food bank/pantry or at the WIC office in a nearby town, and some of the semirural older than I am neighbors have been asking if they could buy some, but it isn't ready yet.
Would like to do more to cut energy costs for winter, but other than caulking again this fall or sewing an extra quilt or window curtain, don't know what else I can afford and do myself.
Nonspecialized parttime jobs at or near minimum wage ($5.15- c. $9 hour) will be harder to come by in a recession as there will be far more competition for them. Teens the last few years have been impacted in the summer and afterschool job markets by more of these jobs going to illegals, and more lower income retired people have begun seeking PT or FT jobs--and not everyone is looking to be a Walmart greeter.
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