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QUICK RETAIL TAKE: Tips For Preparing Yourself – And Your Portfolio – For A Potential Recession

Traders Magazine Online News, February 8, 2019

John D'Antona Jr.

Government shutdown. Volatile stock markets. Brexit woes.

Economic forecasts for 2019 haven’t been the most glowing, and that has plenty of people worried about what a weak economy could mean for them personally, from job losses to a hit to retirement-savings accounts. So, what’s an investor to do?

“It is true that we are in the late stages of the current economic cycle,” said Stash Graham, managing director at Graham Capital  Wealth Management. “The debate is about whether we will have an economic slowdown or an all-out recession.”

Graham said that for those worried about what the coming months might bring, this could be a good time to take stock of your portfolio and perhaps make an adjustment.

“Some of it comes down to what your life objectives are and what your risk tolerance is,” Graham said. “Are you the kind of person who can ride out a down market without losing a wink of sleep, confident that a rebound will happen eventually? Or will you be stressed out?”

Graham shared with Traders Magazine a few tips on how to start preparing your portfolio for potentially bad times:

First, take a deep breath.

“People often let emotions rather than facts drive their decisions,” Graham said. “Many investors panic if they fear a recession, and they make changes that cause what would have been a temporary loss to become a permanent loss. Other investors are ruled by a different emotion – greed – and take chances that they probably shouldn’t.”

Second is to have a long-term perspective on things. Both recessions and recoveries come and go, so it’s always good to keep in mind that old phrase “this too shall pass,” Graham continued. If one stays focused on the long term, rather than the moment, costly mistakes can be avoided. This is especially true if you’re young and retirement is still decades away.

Lastly, is to reduce risk in the portfolio. 

“Even the young and adventurous should want to make sure they have a sound investment strategy and aren’t just rolling the dice,” Graham said. “Having a high tolerance for risk is one thing. Gambling away your future is quite another. So, before the next recession arrives, Graham says, examine ways you can reduce at least some of the risk in your portfolio. If you are already at or near retirement age, you may want to take the risk level down quite a bit if you haven’t already.”

Graham concluded that it’s always important to remember that the answers about what to do with a portfolio won’t be the same for everyone. Personal circumstances should be the driving force, rather than what’s happening in the market on any given day. 

Stash J. Graham is Managing Director of the Graham Capital Wealth Management (

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