7 financial advisors on what they’re doing in 2023 to prepare for a recession

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A number of high-profile financial firms say a recession is likely in 2023. Vanguard expects a “global recession”, economists at Goldman Sachs give it a 35% chance, JP Morgan has called for a “mild recession” and Bloomberg economists said a recession is a 100% certainty. So we asked financial advisors how they personally plan to navigate a potentially imminent recession in the new year:

High-rated municipal bonds and enough liquidity to weather a recession: Transform Wealth’s Craig Evans Carnick

“As a consultant who has spent 40 years watching economic markets fluctuate up, down and everywhere in between, my answer is simple: I am unmoved, as they say in blackjack. As I have always advised my clients, the most critical aspect in navigating any economic downturn is having enough cash to weather the financial storm. My personal portfolio is 50% senior municipal bonds, and the income from that portfolio alone would be enough to support my family through any recession, plus my cash position is two years of additional income. Cash is king in a recession,” says certified financial planner Craig Evans Carnick of Transform Wealth.

Slant towards value-oriented companies – Joe Favorito of Landmark Wealth Management

While Certified Financial Planner Joe Favorito of Landmark Wealth Management says he focuses more on long-term asset allocation, rather than market timing, he notes that last year he “leaned more towards value-oriented companies” assuming that rates would go higher. And it will do the same next year. “Value stocks tend to outperform growth stocks in an environment of rising rates as well as during periods of market turmoil that tend to precede a recession,” says Certified Financial Planner Joe Favorito of Landmark Wealth Management.

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Think long term and don’t try to time a recession – Anthony Ferreira of WorthPointe

Ferreira, a certified financial planner, says he has a systematic approach to investing that he sticks to, including a mix of globally diversified stocks and bonds.

“The best strategy for building portfolios is to make sure they can withstand the ups and downs of the market as it is so unpredictable. Even when we think we know something is going to happen, we don’t know exactly when,” he says. “I don’t remember anyone pinpointing the bottom of the 2008/2009 recession. has already moved or adjusted in anticipation of these events.It is best to have a systematic approach to your investing that you stick to through the ups and downs.

It also has a cash buffer and other low volatility liquid assets to help it weather the ups and downs of the market. “There are many ways to accomplish this that may be appropriate for different people,” Ferreira says.

Hold a globally diversified portfolio – Jeff Bernier of Tandem Growth

Certified financial planner Bernier says he “will continue to own a broadly diversified portfolio geared toward companies with higher expected returns and stocks that are priced below fundamentals and are more profitable.” He adds: “Although stocks may fall further in a recession, part of that is already in current prices. Also, don’t forget to diversify globally.”

Be wary of full-time hires as an entrepreneur – Mark Struthers of Sona Wealth Advisors

“Most financial advisors are very susceptible to market downturns as we get paid based on a percentage of assets under management. Our revenues can easily drop by more than 20% during a recession like now. I am reluctant to fire employees and instead try to be tactical. I recently left a paraplanner and plan to use contract work until we get more clarity on the economy,” says Mark Struthers, a certified financial planner.

Setting priorities for 2023 – Bobbi Rebell, author of Launching Financial Grownups

Rebell, a certified financial planner, says she and her family are now creating priorities for 2023. “Having a clear understanding of what your life costs and planning how to cover those costs if you have an income cut or an interruption total…it also makes sense to evaluate how your behavior has changed during different seasons of life. Chances are in the most recent season, you spent more traveling and socializing. Consider taking a break during the months winter to replenish your savings, and also be intentional when it comes to spending planned in 2023 after the late 2022 spree,” says Rebell, a certified financial planner.

Protect your identity even more now – Taylor Jessee of Impact Financial

“In a more practical sense, one thing I’m doing is becoming a lot more intentional about protecting my identity. I can’t say for sure because identity theft is on the rise as it is, but if the economy gets tougher, I have a feeling scammers will work even harder to commit identity theft and fraud. For this reason, I am reducing the number of credit cards I carry in my wallet in case of theft, destroying any piece of mail with my name and address on it, turning on 2-factor authentication for online logins, not using the my debit card and minimizing the number of checks I write,” says certified financial planner Jessee.

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