The recession is coming.
We just don't know when.
Are you ready?
It'll probably hit the S&P/ASX 200 (INDEXASX:XJO) for six. And discretionary retailers like Myer Holdings Ltd (ASX:MYR). Even the likes of Sydney Airport Holdings Ltd (ASX:SYD) won't be totally immune.
Here at The Motley Fool, we reserve a special disdain for those who do nothing but predict doom and gloom. There's no shortage of them: the bears who've been predicting a market crash every year since 1971, the doomsters who keep telling us that the end is nigh. The double-dip US recession. Etc, etc, etc…
But there is a recession coming.
So what do you do? You don't lose sleep worrying. You don't go to gold. Or cash. You don't give up.
But you also should mentally prepare.
And diversify.
When the recession hits, you don't want to be highly leveraged to consumer spending. And if it's going to be an Aussie-dollar-thumping decline, you don't want to be neck deep in importers.
Instead, be diversified. Geographically. Industry-wise. Currency-wise. Know what you own, and be ready to feel real pain as you ride the choppy waves. But keep investing.
Dividends can ease the pain — at least you're getting something while your shares swoon. And you can reinvest them when the market is low… that's a sweet deal. Here's one company that our dividend expert likes a lot.
