But Christine Benz, director of personal finance and retirement planning at Morningstar, said, \u201cIt\u2019s not a given that we will be moving into a recession.\u201d<\/p>\n
<\/p>\n Christine Benz, director of personal finance and retirement planning at Morningstar and author of \u201cHow to Retire: 20 Lessons for a Happy, Successful and Wealthy Retirement\u201d<\/p>\n \u201cThere are a few indicators that perhaps the economy is weakening. We\u2019ve seen signs that consumers are maybe beginning to rein in their spending a little bit in response to tariffs. But it\u2019s too early to call for a recession,\u201d she said.<\/p>\n However, it\u2019s still good to prepare yourself for a potential economic downturn by doing things like looking at your investment portfolio and saving up more cash.<\/p>\n Reconsider being all-in on stocks<\/p>\n Benz said Morningstar has done research into how different types of investments have performed in economic downturns. The investment management and research firm found stocks in five of the past eight recessions have historically had losses. <\/p>\n \u201cYou wouldn\u2019t want to be all stocks. You\u2019d want to have some bond assets in your investment portfolio and some potentially cash assets as well,\u201d she said.<\/p>\n In eight of the past recessions, dating back to 1929, Benz said, Treasury bonds have stayed in the black. This means they\u2019ve had positive returns in a recession, while stocks were often performing poorly. <\/p>\n Benz said if you\u2019re going to invest in stocks, some industries are worth focusing on such as health care.<\/p>\n \u201cHealth care spending is usually a category where people continue to spend,\u201d she said. \u201cThey\u2019ll keep going to the doctor if they need to. They\u2019ll buy medications that they need to take. … So health care [stocks are] usually a good place to be.\u201d<\/p>\n She said people often switch to lower-price consumer brands in a recession, but they\u2019ll continue to shop, especially for staples like diapers or paper towels. But she cautioned not to over invest in \u201cconsumer discretionary stock\u201d like retailers.<\/p>\n Other investments to consider are utility companies, which are typically seen as recession proof as most people will continue to pay their gas or water bills. <\/p>\n Boost your savings <\/p>\n The traditional rule of saving three to six months worth of living expenses is still worth following, Benz said.<\/p>\n \u201cMany households don\u2019t have that much, but the idea is that you\u2019re protecting yourself against job loss, which is a greater risk in a recessionary environment,\u201d she said.<\/p>\n Having cash also reduces the risk of taxes or penalties if you need to access your money quickly.<\/p>\n Check your home equity<\/p>\n Homeowners who have equity built up should consider preemptively lining up a home equity line of credit, Benz said.<\/p>\n \u201cYou shouldn\u2019t have it instead of your emergency fund, but you would have it in addition to,\u201d she said. \u201cAnd the idea there is if you have exhausted your emergency fund … and maybe you\u2019re still looking for a job, or you still need additional cash, you could turn to that home equity line of credit.\u201d<\/p>\n She also said the interest rate will typically be lower than a credit card. <\/p>\n \u201cIt\u2019s a good kind of backup to the backup,\u201d she said. <\/p>\n Have a financial question you want answered by an expert? Leave us a voicemail at 312-321-2122<\/a> or email us at moneyquestions@suntimes.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"We\u2019re gathering your questions about all things money and finances. Then, we get your questions answered by the…\n","protected":false},"author":2,"featured_media":170515,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-170514","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/170514","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=170514"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/170514\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/170515"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=170514"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=170514"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=170514"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Christine](\"https:\/\/cst.brightspotcdn.com\/dims4\/default\/752253b\/2147483647\/strip\/true\/crop\/2400x3596+0+0\/resize\/840x1259!\/quality\/90\/?url=https%3A%2F%2Fchorus-production-cst-web.s3.us-east-1.amazonaws.com%2Fbrightspot%2F5d%2F5e%2F8d4e3d134378a0f565db76a05fa5%2Fchristine-benz-2018.jpg\")
<\/p>\n