The average bull market lasts for around 4.5 years in length before a correction in the stock market occurs and a culling swallows up businesses and sometimes even families that aren’t actually prepared, or just taken off guard by the economic swing.
Allegedly after the 2008 crisis of a recession, there no longer is too much of a reason for panic. Supposedly recessions are supposed to be milder, but this optimistic forecast provides very little coverage in the event of state, federal, or private business down sizing costing market jobs.
While hope is vital for virtually all business done in our day to day life, hope simultaneously is not necessarily a strategy. So in today’s articles we are going to share 5 tips, or 5 strategies, on how best to be prepared for a slower moving market- whether you’re a business owner yourself, or the prudent voice of reason for your households finances.
Tip 1: Learn the Secret to Finding Better Deals
With the convenience of online shopping, a lot of products and services become so reputable, we neglect to find better deals sheerly out of convenience. Back in the day of carnivals, workers use to sell things in the middle of tents. People would crowd into these tents just to see what the ruckus was all about- and before they know it, carnival workers dressed as civilians are jostling them, pushing them, to the front of the pit where it then becomes easier to buy something from the venders just to get out of line.
People are still doing this kind of trickery today. In the modern world you’re getting upsells, exclusive offers, limited offers, and side sales, all shoved on you at once. And unless you have a strong basis for judgement, you’ll realize a ton of things are cheaper if you just examine products or services from a birds eye view.
The truth is, there are so many places you can go that will help you compare prices. Why go to a GNC for vitamins when you can mostly always find the same product for less from a direct seller on Amazon. Why use an expensive $150 a month software for your business online when there most likely is another version that does virtually the same thing that’s $15 a month.
The point really is to create a list of all of your expenses currently. As a thought experiment, create a notepad in your cell phone and write down everything you spend money on in a single month- every item. From utility bills, coffee, to possibly just bad habits. it almost becomes impossible not to find something you’ll be happy replacing.
Tip 2: Diversify but Save
Every single recession shows the same pattern among citizens in the United States. Every time there is a recession and the business they work for or manage is under a bit more of a squeeze, spending goes down and savings go up.
This proves that American’s are completely okay with saving money when they feel it’s necessary. But when the market has been at its longest bull run in the history of the country, it possibly is a good idea to start saving money now.
The point of tucking away money is multifaceted; on one hand putting money into an emergency account is vital in case something bad does happen, in another case, if you are relatively certain that your job is a secure one, you can now be more aggressive in investing when the market is down.
In fact, this is Warren Buffett’s strategy; make investments throughout the year since it is impossible to predict the perfect time for anything on the market anyways, but then go investment hunting like crazy when stock prices do drop. This strategy has been called “keeping the powder dry”. Stay alert because deals are always deals typically, but unload when you have the best shot.
Tip 3: Reconsolidate your Debt
Currently the Federal Reserve has slashed loans in the United States to an all time low. Loans are being offered at rates under 3%. I shouldn’t have to go into verbose details about what this means for you, however if you do have a car loan, mortgage, or student loans that are 6%, you can save over $10,000 just on interest payments over a 30 year term if you’re only making most minimum payments.
Interest rates can swing in the wind depending on the confidence of the market and the mode a bank or other financial institute is in. During lending modes, loans are typically at the lowest. This is the best time the United States market has even seen in the regard of lending, so don’t miss this opportunity.
Websites like Financer.com can help connect you with trusted lenders over a wide network. Their “compare loan” feature allows you to find a rate with terms that are in the ballpark of what you require.
Even if it comes down to reconsolidating credit card debt, lock in loans while they are in fact the cheapest the history of the United States has even seen.
Tip 4: Create a Side Stream of Income
Tip 4 on the list is not to reinvent the wheel and come up with some ambitious entrepreneurial venture that will pay back millions after soul sucking days of struggle, however if that does appeal to you than more power to you.
Simply put, look into ways you can leverage skills you already have now to create income for yourself on the side; or at the very least, make sure you have a skillset that can pay you should times become financially tougher.
Whether you decide to babysit, walk dogs, clean toilets, there probably is a skill or two you do have that you could sell to someone else. Hot industries online are web design, Google AdWords management, Conversion Rate Optimization, etc…
With how many free tutorials there are online discussing all these topics ad nauseum, you can rest assured that you’ll never truly be alone on this endeavor.
Tip 5: Enjoy your Life
Aside from being a good employee and watching every penny you spend there really is only so much you can physically do. While the economy is outside of your control, you can in fact always carry a good attitude.
At the risk of sounding insensitive to those whom have been affected by a recession, realize that for most people, nothing really seems to change for them. They don’t even really know they’re in it, and life just goes on business as usual.
To reiterate though, we are not suggesting ignorance is bliss, because everything is a good chance something bad won’t happen to you… until it does.
If you become another statistic to a volatile stock market, treat the problem like you would a good game of tennis or basketball, or any competitive sport you might enjoy. Face it dead on, give it everything you have, and just don’t stop. Tough times don’t last, tough people do.