I heard about recession on TV. But what is a recession? And what causes it?
A recession is a period of economic decline that is usually triggered by consumers starting to spend less. That in turn causes businesses to cut costs and lay off workers. This results in higher unemployment, leading to even lesser spending.
Some people and businesses may also not be able to pay off debt since they’re earning less, causing even more economic damage.
How can you predict when a recession is gonna happen?
It is impossible to accurately predict a recession. But there is one telltale sign of a recession: when short term bonds pay a higher rate of interest than long term bonds. Generally, it is the other way around, and this odd reversal is caused by investor fear and uncertainty about the future.
How long do recessions typically last?
Recessions can last anywhere from 6 months to 1.5 years. However, most recessions in recent times – like the Great Recession following the financial crisis in 2008 – have lasted eight months to one year.
How should I invest during a recession?
Stock prices tend to go down during a recession, so contrary to popular behavior, it is a good time to invest for the long term if you have the cash to spare. A great way to invest during this time is by using a strategy called Dollar Cost Averaging, which is proven to almost always yield a good return in the long term.
Check out the Dollar Cost Averaging video to learn more and get great returns.
Podcast: What is a Recession and How to Invest Profitably During a Recession?
Fun, informative and concise episodes by a 10-year old, breaking down complex financial concepts in a way that kids and beginners can understand. Episodes cover personal finance topics like saving, investing, banking, credit cards, insurance, real estate, mortgage, retirement planning, 401k, stocks, bonds, income tax, and more, and are in the form of a conversation between a cowboy (a finance novice) and his friend, a stock broker. Making finance your friend, only at Easy Peasy Finance.
A little bit about me: I have been fascinated with the world of personal finance since I was 6! I love to read personal finance books, and keep myself updated on the latest by reading various personal finance magazines. My friends often ask me questions about finance because they find it complex and intimidating. That’s what inspired me to start my YouTube channel called Easy Peasy Finance when I was 8, and this podcast 2 years later.
Everything you need to know about recession: What is Recession, What causes a Recession, How can you predict when a recession is going to happen, How long do recessions typically last, How should you invest profitably during a recession, and more.
For show notes and transcript, please visit: https://www.easypeasyfinance.com/what-is-a-recession-and-how-to-invest-profitably-during-a-recession/