Q: If we aren’t in a recession, we seem closer to one than we were before. What does it mean for me?

A: As we’ve mentioned before, the official pronouncement of a recession takes into account various factors, including the best-known indicator of consecutive quarters of economic contraction. We sometimes won’t get that official word until after a recession is over.
For many long-term goals, a recession doesn’t mean much. Investors who are adding to their portfolios can benefit from market declines. Those who aren’t adding can still benefit from dividend and interest reinvestment, allowing them to buy more shares at lower prices. When the market recovers, those additional shares can appreciate, compounding the benefit of continuing investment.
Even for those drawing from their accounts, the impact of recession is reduced by those same factors. For retirees, the most important factor in long-term success is maintaining a reasonable withdrawal rate.
A recession does affect different industries in different ways, so those in more sensitive professions may want to increase their reserves to minimize the risk of income reduction. As always, we are happy to talk about how your specific needs are affected by changing market and economic conditions