Your Investment Recovery Playbook
3 Urgent Opportunities & 2 Uncommon Defense Strategies

Will a recession arrive in 2023 and how bad will it be?

The threat of recession has been hovering over the American economy since 2022, and it may arrive soon.¹ How long will it last (and how bad will it get)?

When you’re dreaming about (or seriously planning for) retirement, you may worry:

“Will I need to work longer, delaying my retirement dreams?”

“Will I have to downgrade my retirement lifestyle so my money lasts?”

Knowing what to do during and after a recession can help you keep your portfolio working towards your retirement date.

Losing money is a big fear during market declines, with good reason.

Logically, you know that bear markets and recessions come and go, but you still wonder where you should invest, whether you should sell out of the market, or if cash is “safer” than staying invested.

So what do you do next?

Fortunately, the market has been through tough times like these, and you can steal the secrets of those who’ve used recessions to grow their investments before you.

This personal recovery playbook is designed for hard-working savers just like you who are looking for a way to help recover from a recession.

You may be asking yourself questions like:

• Is my current strategy the right one for right now?
• What’s the ideal balance between protecting against losses and still allowing for growth?
• Am I invested properly so I can retire when I planned?
• How much cash should I have on hand?
• Are there opportunities that I should take advantage of right now?
• Do I have a financial professional in my corner who can help me with my playbook?

If any of these questions resonate with you, keep reading…

Offensive Play #1

Use the bucket, not the thimble

Bear markets tend to make investors (especially pre-retirees!) uncomfortable, but remember that now is the time when opportunities are available at a discount! Bear markets don’t last forever — in fact, they average about nine and a half months in duration.²

You don’t want to miss out on a sale, so you need to keep your eyes open and act fast.

You have the opportunity to:

• Diversify your portfolio with discounted investments that stabilize during a recession
• Buy investments you’ve had your eye on that were previously “too expensive”
• Position for your current age and stage of life while investments are on sale

Instead of focusing on losses, look for underpriced investments that can help you withstand market turmoil without giving up the growth your investments need for the long term. As Warren Buffett says, “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.”

Game-changing questions to ask yourself include:

• Is my current portfolio adequately diversified?
• Am I missing any investments that could reduce some market risk?
• Have I considered whether it’s time to buy stocks I’ve had my eye on?
• Do I have a financial professional who can advise me on opportunities I should benefit from?

Offensive Play #2

Control what you can

When the next recession will arrive, how long it will last, and how long it will take to recover are all unknowable.

However, this doesn’t mean your money is completely outside your control. You determine:

• How you react to the market
• What you do right now
• How much and where you invest

… and (barring unforeseen circumstances such as illness) you decide if:

• Waiting a couple of years may allow you to have the retirement you’ve always dreamed of
• Working part-time or consulting for a few years may shore up your money

But you may not need to change anything about your retirement dream, even during a recession if you take strategically timed action while you’re working.

Game-changing questions to ask yourself include:

• What steps should I take to remain in control of what I can?
• What actions should I take now (like saving more) that will help me retire when I planned?
• What can I control that I haven’t already?
• Do I have a financial professional who can help me stay calm while everyone around me seems to be in panic mode?

Offensive Play #3

Remain in place during the worst days of chaos

Selling off all your investments would be a serious mistake, though one that’s easy to make when the market is tumultuous and your next play may not be obvious to you.

The problem is once you’ve fled to safety, it’s hard to start investing again until the market starts rising, which means you’re buying high. If you want to make the most of the growth potential of the stock market (and stocks are the asset class known to outpace inflation), you need to be invested.³

Turn off the financial news if you need to, and check your portfolio value less frequently so you’re not tempted to sell your growth assets.

Game-changing questions to ask yourself include:

• What choices do I need to make to ensure I stay invested?
• Does it make sense to sell off some of my stocks and buy something less risky, given my current stage in life?
• How do I focus on moving forward down the field towards retirement?
• Am I in touch with a financial professional who can help me avoid making emotional decisions?

Defensive Play #1

Assess your need for protection

Depending on when you set up your investment plan, you may be a few years older and close to needing the money that you’ve invested. There are a number of ways that you can be more defensive and protect what you have, while still leaving enough money invested that you capitalize on the next recovery and bull markets that will materialize in the future.

You might consider:

1. Increasing the amount of bonds and cash you own
2. Buying an annuity or other type of insurance
3. Leaving your portfolio alone because you’re properly diversified for your current lifestyle

While protection sounds good in theory, you do need to pay for it one way or another — in fees or in lower returns over time. Make sure you take the cost into account when you’re thinking about safeguarding your money.

Game-changing questions to ask yourself include:

• Do I already have some precautions against portfolio losses built in?
• If I want to add additional protection, what will it cost me all-in, including fees and returns?
• Will this additional protection negatively affect my money when the market recovers?
• Is there a financial professional who I can consult regarding whether or not I need to play more defense?

Defensive Play #2

Don’t reinvent the wheel

This probably isn’t your first market dip, and it likely won’t be your last. However, there is a wealth of wisdom available from those who have (collectively) invested for many years. They know what works and what doesn’t. Many wealthy investors hire financial professionals with experience in chaotic times to help them make the right decisions for themselves and their families.

TV and social media are full of so-called experts and talking heads. You might have friends who report their portfolio moves to you in real time. Yet no one but you truly understands your personal situation. Their advice could be way off the mark and even result in you losing money. Instead, talk to a professional with knowledge and experience who can tailor their advice to fit the needs of you and your family.

Game-changing questions to ask yourself include:

• What might be helpful to me that I don’t already know when it comes to the markets?
• What else should I be doing during these times?
• Have I been relying on someone who isn’t quite the right fit for me or who isn’t a pro?
• Do I have a financial professional who’s experienced and ready to learn about my goals?