Get Ready for a Recession: Key Steps to Think About [Podcast]

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Is a recession on the horizon—or are we currently experiencing one without being aware? Mike and Vero analyze the news, interpret the indicators, and most crucially, offer guidance on what investors should do if they’re worried. Covering topics from yield curves to consumer sentiment, corporate earnings to job statistics, this episode provides a rational, dividend-growth-oriented approach to brace for the forthcoming downturn—without apprehension.

This episode is aimed at anyone in retirement or in the process of building their investment portfolio, contemplating: “Should I make adjustments now—or adhere to my strategy?”

You’ll Discover

Not All Declines Are Alike

Mike starts by clarifying the distinctions between a market correction, a bear market, and a complete recession—and why grasping these nuances enables investors to stay composed. News headlines often scream “crash,” but context is essential.

• A correction represents a natural aspect of investing (10% decline) and is frequently forgotten within a few months.

• A bear market (20% decline) usually appears more severe, yet doesn’t always endure long or result in recessions.

• Recessions are economic occurrences, not market phenomena—and stock markets typically rebound before they’re officially recognized.

Recognizing these distinctions aids in maintaining composure when others are in panic mode.

Current Economic Indicators indicate What

Concerns about a recession have lingered since 2022, although the data remains mixed. Mike and Vero explore what investors should take into account—and the difficulty in timing these occurrences. Economic indicators often lag, while markets anticipate future trends.

• Yield curves remain positive (just barely), not inverted.

• Unemployment rates in the U.S. and Canada are relatively stable, albeit slightly easing.

• Corporate earnings are decelerating but not collapsing, with variations across sectors.

• Consumer expenditure and sentiment are deteriorating—yet not critically, particularly when juxtaposed with past recessions.

The economy is not in a boom, yet it’s not definitively in a recession either—maneuvering through this phase is intricate.

What Actions Should You Take If a Recession Approaches?

Rather than attempting to time the market, Mike suggests practical preparations based on your life stage. A complete portfolio overhaul isn’t necessary—but intentionality is essential.

If you’re retired or approaching retirement:

• Streamline your portfolio and trim your high performers while markets are strong.

• Establish a robust cash reserve to prevent selling during a downturn.

• Evaluate your sector allocation—tech exposure may be too high after years of growth.

• Conduct a worst-case scenario simulation in your financial strategy and adjust if required.

If you’re in growth mode:

• Beware of overconfidence—volatility and corrections are part of the environment.

• Understand your investments and their rationale; do not solely depend on “brand names” or past performance.

• Steer clear of speculation or hot tips—maintain a clear investment thesis for each stock.

• Don’t remain too long on the sidelines—having “dry powder” may cause you to miss opportunities.

Preparation is key, not prediction.

What Matters Most: Your Conviction and Your Strategy