Watchlist Sponsored By :
![]()
- Surcharge Appealing to Limit Bank Size: Fed's Tarullo
- European Commission Objects to Sun Micro-Oracle Deal
- Obama Says Will Raise Currency Issue with China
- Can Apple Top Microsoft as Most Valuable Tech Firm?
- Buffett to Sell Stakes in Norfolk Southern, Union Pacific
- Cramer: 5 Stocks to Play the Next Bull Run
- Do You Know Your Coca-Cola Myths?
- Electronic Arts Beats Street, Announces 1,500 Job Cuts
- Time Is Here to Look at Overseas Stocks: Bill Gross
- Why Google is Paying $750 Million for Ad Mob
- Warren Buffett to Sell Stakes In Union Pacific & Norfolk Southern
- Nov. 9: Unusual Volume Leaders
- The Battered Businesses Behind Housing
- Modern Warfare 2's Record-Breaking Launch
- Merck’s Mega-Monday Morning
- Why are Traders Bullish on This Food Company?
- Profiting From Natural Gas: Strategists
- S&P Stocks Trading at New 52-Week Highs
MOST SHARED
- Future of Marketing
- Oil Tomorrow
- Dow Up Over 100 After G20 Stimulus Pledge
- Obama Says Will Raise Currency Issue with China
- Priceline Crushes Profit Forecasts; Shares Jump
- Can Apple Top Microsoft as Most Valuable Tech Firm?
- Maria's Market Message
- A Year on, China's Stimulus Postpones its Problems
- Trial of Ex-Bear Stearns Managers Goes to Jury
powered by digg
Steps to Recession-Proof Your Life
Topics:Personal Finance
The Fed is a little bit worried. The index of leading economic indicators is so-so, housing's still
![]() |
AP |
Maybe it won't get that bad. Many economists are suggesting the recession predictions are overly pessimistic. Instead, they say we're in for slow growth or stagnation. That's not much better, is it? Here's how to protect your family, yourself and your portfolio from the blahs.
- Diversify your ability to earn money, to protect yourself from job loss. Take that Web design class, or set up that eBay biz you've been thinking about. Make a list, just for your own peace of mind, of ways you could earn extra money if you really had to.
- Buy some CDs. The banks need cash and are continuing to prop up rates on certificates of deposit even though the Federal Reserve has been cutting short-term rates. Don't put all of your long-term money in the bank, but a few CDs, salted away and earning 5 percent or better for the next year or so, will do nicely.
- Invest in toilet paper and the other necessities of life. Sure, this is conventional wisdom, but it works. Companies that produce items that people buy in good times and bad will reward investors who own their stocks, according to research firm Briefing.com. Some industries that have delivered 20 percent-plus returns during recessions include tobacco, health care, personal products, pharmaceuticals, paper packaging and footwear.
- Buy dividends, too. If the economy stays weak or continues to falter, you might have to wait a while for your growth stock picks to pay off. Get paid to wait by choosing companies that pay decent dividends. You can screen for stocks yielding better than 3 percent, or buy an exchange traded fund that focuses on stocks that pay solid dividends.
- Manage your debt. Do what it takes to kill the balance on your credit cards, even if it hurts. Rates on home equity lines and other variable-rate loans may falter, or at least stay relatively low, if the economy is weak, so use that opportunity to pay bigger chunks of principal. If you have a variable-rate mortgage and would like to swap it for a fixed-rate loan, you'll get your best opportunity in a downturn. Be prepared to jump on a new loan when rates fall to a level that's good for you.
- Don't move. If you are renting and haven't bought a home, it won't hurt you to wait a little bit longer. Most housing analysts think the downturn in home prices hasn't finished. If you already own your home, it's not going to be a good time to sell. Stay put if you can.
- Spend less and save more -- a time-honored tradition during troubled times, and with good reason. The less you spend and borrow, and the more you sock away, the less stressed your own personal economy will be. Make little changes, like using library books and videos instead of spending money at the movies and bookstores. Brew your own coffee and pour your own beers. Cook more of your own food. Send all that you save to the bank, or to vanquishing credit card debt.
- Focus on cutting your energy and utility spending. Most people could significantly improve their household budgets if they limited the amount they paid to the cable, water, electric, gas and telecom companies. Wear sweaters and turn down the thermostat. Use your cell phone all the time and give up your landline. Say goodbye to HMO. Squeeze those monthly expenses now; you can always add more later.
- Prepare for the better times. Downturns are followed by expansions that bring rising stock prices, home prices, job offers, salaries and the like. All of the careful planning you do now will get you ready to jump in when the economy recovers.
Watch for early signs; election years are often good times for investors. Remember, you're not giving up gratification, you're just deferring it.
Copyright 2009 Reuters. Click for restrictions.
- Do free market libertarians really believe what they say about ethics and shareholder value? The Big Money takes a look.
- Cramer did the research and found eight stocks that lead the pack. Read on to get his top picks.
- On the anniversary of the fall of the Berlin Wall, many in the former Eastern Bloc recall communism fondly.
- Software, biotech firms, even banks are watching a particular Supreme Court argument today.
- From politicians to CEOs to companies, here's your chance to vote for the winners and losers of 2009.
- A new sinister Internet viruses can turn you into an unsuspecting collector of child pornography.
MORE FROM CNBC











