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“People should understand how a recession is going to impact them personally: Is your job at risk? What is a high-inflation environment going to do to your expenditures? How is your commute to work? Can you carpool? Plan accordingly.” — Mike Rudow, Wealth Advisor

Welcome to The Financial Commute, where Wealth Advisor Chris Galeski gives you the rundown on what’s going on in the financial world, how it affects you, and what to do about it. Today, he welcomes fellow Morton Wealth advisor Mike Rudow to discuss the upcoming recession, market volatility, and inflation.

Mike says it’s easy to get bogged down by technical terms when it comes to a recession, when what truly matters is having a financial plan. Once you understand how a recession will impact your personal life and goals, building a plan and a resilient investment portfolio is essential. Recessions are a natural part of the U.S. economic cycle and it’s important to have a plan that will stay relatively stable in those periods.

If you’re investing, you may consider using a bucket approach,  where some investments are geared toward growth, some are geared toward the long term, and some are geared toward ensuring you have enough cash on hand for emergencies.  You may also want to consider investing in more high-quality, dividend-paying companies since they tend to be more resilient during recessions.

Mike also reminds us that we must all make some sacrifices during economic slowdowns, and that’s okay. The key is to find areas of spending we are willing to compromise on. Mike encourages listeners to reach out to a financial advisor to help them consistently update their portfolios and financial plans. Consistency is key here, as not reviewing your allocation and plan on a regular basis may mean that they start to differ meaningfully from your risk tolerance and goals. Having a second professional opinion is critical to assessing risk and reward and ensuring your portfolio is prepared for recessions.

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Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax or legal advice. You should consult with your attorney, finance professional or accountant before implementing any transactions and/or strategies concerning your finances.