Technically, we may already be in a recession.
U.S. recessions are officially determined by a nonprofit research organization, the National Bureau of Economic Research (NBER), which defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.” But a “technical recession” is generally accepted as two consecutive quarters of contracting Gross Domestic Product (GDP), which we have already experienced according to the Bureau of Economic Analysis (BEA).
Many analysts think that not only are we in a recession, but also that it will be a historically long one. On August 2, 2022, Yahoo Finance reported that Dreyfus Mellon Chief Economist Vincent Reinhart, a 24-year veteran of the Federal Reserve, said, “I wouldn’t be surprised if [NBER] actually push[es] the start of the recession to the end of last year…. We might wind up being in one of the longer recessions on record.”
I’m a firm believer in financial education and preparation. In uncertain economic times like those we’re currently experiencing, it may be more important than ever to freshen up our financial know-how.
Understanding how to budget and diversify your portfolio is especially important.
If it’s true that we’re currently in a recession, it’s possible that the stock market, as well as income, may decline, as companies make less profit and stock owners become more risk-averse and look to other assets to protect or grow their wealth. This is one reason it can be so beneficial to maintain a high level of financial literacy. Understanding how to create and stick to a budget can help you reprioritize your finances if you become worried about a loss or reduction of income.
Similarly, knowing even the basics of portfolio diversification can help you understand how to shore up your finances to help protect your wealth and reduce your overall risk exposure in the event of further economic downturns.
But while adding protection to your portfolio at any time may be helpful, it may be most helpful before your portfolio is significantly impacted by market forces.
The sooner you can increase your financial literacy, the more you can learn.
When the time is right to take action, you want to be ready—not still figuring out the basics. This is another reason to get moving on your personal financial education—the sooner you get the basics down, the sooner you can make educated decisions. Better yet, the sooner you have the basics down, the sooner you can expand your financial education further and gain even more insight into your unique financial situation.
It’s never a bad time to learn something new. In a financial climate where analysts are discussing whether or not a recession has begun, now may be a great time to start learning, or learn even more, about personal finance, portfolio building, and diversification.
U.S. Money Reserve has made it easier than ever to expand your financial knowledge.
In the past year, we’ve put countless hours of work into making it easier than ever to access our vast library of blog posts, special reports, videos, and more. From our retirement worksheet to help you evaluate your current retirement plan to Executive Insights written by U.S. Money Reserve President Philip N. Diehl and Senior IRA Strategist Edmund C. Moy—two former Directors of the United States Mint—we have enough content available through our recently revamped website to keep you engaged and learning for hours.
Of course, our specialty remains gold and other precious metals, which may be able to help you reduce your overall level of risk exposure and add a level of protection to your portfolio during times of economic uncertainty. But we also provide weekly “Market Insider” articles and curate other market news pieces in our website’s news feed. Additionally, we continue to publish new and exciting material to help you make educated decisions for your portfolio. I encourage you to bookmark our site and check back regularly, as we're constantly updating information on a daily basis.
It’s very possible that America is currently in the midst of a recession. What we must decide now is what actions we can and will take to weather the storm.
To learn more about the protective power of precious metals, CLICK HERE to request a FREE copy of our Gold Information Kit.