{"id":8696,"date":"2019-10-08T08:00:30","date_gmt":"2019-10-08T13:00:30","guid":{"rendered":"https:\/\/www.cainwatters.com\/digitalblogs\/?p=8696"},"modified":"2019-10-09T07:55:20","modified_gmt":"2019-10-09T12:55:20","slug":"recession-investment-risks","status":"publish","type":"post","link":"https:\/\/www.cainwatters.com\/digitalblogs\/recession-investment-risks\/","title":{"rendered":"If A Recession Hits: 5 Tips to Mitigate Portfolio Risk"},"content":{"rendered":"\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t

This is part one of three in a series of articles about preparing for a potential recession. Over the coming weeks on our blog, CWA will deep dive into strategies for protecting your portfolio, business and personal finances. \u00a0<\/em><\/p>

\u00a0<\/p>

Talk of a possible recession has trickled into media coverage and many are asking: will there be a recession? How will we know if it\u2019s coming or if it\u2019s here already?<\/p>

The definition of a recession is clear: it\u2019s consecutive quarters of negative gross domestic product. Most economists and financial professionals look for the country\u2019s economy to shrink for at least two quarters. Currently, we still have a growing economy with the recent measurement of GDP positive at 2.1%. However, recessions can also be hard to predict because forecasting national business cycles is difficult.\u00a0<\/p>

Recently, one indicator that\u2019s concerning many economists is the inverted yield curve. Because it is a measurement of interest rates, normally it is an upward sloping curve. It becomes inverted when long-term interest rates fall below short-term ones. Historically, inversions of the yield curve have preceded many of the U.S. recessions, with economic recession occurring on average 14 months after it occurs.\u00a0<\/p>

According to Brian Bortz<\/a>, CPA and Partner at CWA, an inverted yield curve is rare: \u201cIt\u2019s happened only nine times since 1966 and we\u2019ve had seven recessions since then. When it does happen, it\u2019s odd. Someone is willing to pay you more to hold money for three months versus 10 years. It\u2019s usually a precursor to there being a problem with the economy. It is a predictor but it\u2019s not perfect.\u201d<\/p>

There are other indicators that Brian and other financial planners track to determine if a recession is coming:<\/p>