“Recession is a normal part of the business cycle” – Investopedia
What is a recession
A period of declining economic performance across an entire economy that lasts for six months. Recessions often lead to business failures, bank failures, stock market meltdowns, and global slowdown. Although recessions cause local and global panic, they act as a filter to weed out weaker businesses that cannot adapt quickly.
Causes of recessions
2020
The recent Coronavirus pandemic helped contribute to the decline of the current global economy. All economic industries took a hit due to the inactivity of consumers. Entire cities are shut down to prevent the spread of this highly contagious virus. Although this plan may slow down the spread of the virus, employees in the services and retail industries do not usually have paid sick leave.
2008
The 2008 recession was caused by the U.S housing bubble and the global financial crisis. I think the 2008 recession was mostly due to greed. Banks and consumers were taking on more risk and responsibility than they could handle with the hopes of making more money.
Preparing for a recession
- Find ways to cut back.
- SAVE MONEY.
- Look for buying opportunities. Most assets will go on sale during a recession. EX. Land, stocks, businesses will be cheaper during this time.
- If you’re an investor, focus on long term investing. Invest in companies that you use and trust. Do not invest for short term gains or try to time the market.
- If you’re a business owner, digitize your business.
Actions
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