Been Waitin' on that Recession
Updated: Jul 30, 2020
Make no mistake, a recession was coming whether the COVID-19 Pandemic happened or not. It may have sped up the process via a complete Economic Shutdown across the United States which provided an excuse to flood businesses and individuals with that Stimulus Money, something you never would have seen in the regular cycle of the Economy.
Strong recovery is eventually met with a downturn which is where we were heading. The analysts had it on their radar (as they always do) but no one saw it happening this way. Regardless, it's here and it's time to figure out how you’re going to capitalize on it.
“no one saw it happening this way”
Anyone who witnessed 2008 first hand knows that a recession presents opportunity for those who have the ability to take some risk (combined with access to fast cash) will have a leg up while everyone else is in a panic. Considering I was only 23 years old when the last recession hit, I wasn’t exactly positioned for success when the opportunity presented itself. Sure, I bought up some stock in companies like Sirius, Ford, and Haliburton when the crash happened and made a few bucks but the real money play was in Real Estate which was just out of my grasp at that time.
I’ve been waiting patiently on the sidelines for the next time the cycle of the economy took a turn for the worse so that I wouldn’t be kicking myself for being overextended and making the mistakes witnessed by those who thought the strength of the market would never falter. Through safe investments and diversification, it looks like it’s time to figure out how I’m going to jump in and kick this economy’s ass. The only question now, is how...and more importantly, when?
The Worst is Yet to Come
Because that’s still yet to be seen. The Stock Market appears to be in denial that anything but sunny days lie ahead and the housing market is seemingly as strong as it was before the shutdown started. It would imply that everyone is trying to figure out what move to make next. With uncertainty around every corner, it will only be a matter of time before confidence runs out.
"Most don’t have the recommended 20% so they opt for the minimum of 3.5% to get themselves into a house they can’t afford."
The average person is hoping to maintain some normalcy but until we’re back to a time where the restraints are lifted and we become unchained from our homes we won’t know how the human behavior aspect of this shutdown will affect the financial world. I’m betting though that sooner rather than later the stock market will react to the fact that people aren’t going back to work, the Government is no longer willing to stimulate the consumer’s bank account, and the banks are unwilling to write loans for potential home buyers without a large lump sum for a downpayment. And if we know anything about the average buyer, they hate putting down more cash up front than they have to. Most don’t have the recommended 20% so they opt for the minimum of 3.5% to get themselves into a house they can’t afford. I assure you, that minimum down payment on an FHA Loan is about to shoot up, eliminating many first time buyers from the housing market.
All of this will still take some time. Get yourself ready for the next few months because that’s when the winners and losers of the next 10 years will be defined and start making their moves. I’m not the only one who has been Waitin' on that Recession...so make sure you time this one right.
But don’t worry, if you miss your opportunity, you’ll have another chance in about 10 years or so...
Stay with StruggleState.com for more information as we navigate through the ever changing economic landscape.