Everyone is afraid of a possible recession, and we understand that many of you will consider changing the way you spend, save, and invest, but we at Valley Oak Wealth Management recommend holding off on any drastic changes to your investment portfolio for a few reasons.


During recessions, people tend to make sporadic and reactive money decisions.

“Recessions are tough, and the possibility of making a desperation trade is always prevalent,” says Davis. “I believe that before the Recession hits, it’s imperative to know what you’re invested in, what your goals are, and to take the time to examine and reassess these things. Because during a recession you could have an emotional response and say, “Whoa, I have to get out,” but if you’re prepared, you can just stick to your plan, forgo the emotions, and whether the storm.”

Avoid impulsive investment decisions by asking yourself these questions:

  • Am I at ease with the degree of risk involved in my investments?
  • Do my investments align with my long-term objectives?
  • Am I okay with how volatile the stock market is now and will most likely be in the future?

“If the answer to any of those questions is “no,” then I’d advise reconsidering the allocation of your investments and thoroughly reviewing your portfolio,” he says. “Stocks and the S&P 500 fell by 40% during the 2008 crisis, whereas the bond market as a whole only fell by 10%. If you can’t handle the risk, it could be a good idea to revisit your investments and reduce your risk by investing assets not correlated to the equity markets.”


A recession is not the time to invest in something you don’t fully grasp.

“Don’t invest in anything that you are unfamiliar with, especially prior to a recession,” says Russell.

For example, in the late 1990s and early 2000s, novice and seasoned investors poured their cash into internet startups hoping to profit off the new technology, but instead, many were met with mass capitulation and loss.

“What was the rationale behind their investments in the Dot-Com bubble? Did they do enough research to understand how sectors work before they invested? We still see this bullish behavior all the time…investors choosing to take a chance on a concept or even making an investment decision based on emotion, speculation, or their “gut feeling”. They might understand the product or services but have no idea about the business model and if it’s sound.”


Employing a financial advisor for continuous assistance would be a good idea.

If the anticipation of a possible recession has you on edge, Valley Oak Wealth Management suggests seeking current and future help from a financial planner.

Mr. Russell says, “If you’re going to become serious about the possibility of a recession, now is undoubtedly the time to evaluate if it makes sense to have financial counsel. As I say to all my clients, if you believe that the world is not coming to an end then the good news is that this could ultimately lead to one of the best buying opportunities in decades; but for now, patience is paramount.”