Recession coming ... strategies?

[David Epstein]

all, a recession is coming.  No I don't know when, and am not seeking to time the market or even predict when it will happen. But recessions always come and the current recovery/expansion/bull run is lengthy by historic standards.  2017? 2018?  Later?  I don't know.

That said.  Assuming a stock market downturn in the next 6-18 months with attendant economic effects (rising unemployment, declining interest rates, dip in home values), is anyone waiting on the sidelines and holding cash to either pounce on RE and/stocks when they drop 5-20%?

Thoughts?

Thanks as always to the BP community for thoughts and insights.

[Joshua D.]

@David Epstein

I have seen quite a few of these posts over the last 2 years, and honestly it's a good question. "How do you invest when things could go down". For me the answer is quite simple: if you are Buying good properties WELL below market value (impossible with stocks) then force appreciation, rent and refi, (get all your cash back) your downside is limited. We personally shoot to have rent be 2x of PITI. Works well for us.

The market can go way up and I'm in a position to win. The market could go way down and I'm in a position to earn cash-flow, as my 30 fixed rate payments did not change. 

Now with that said as we grow in our investing, we choose to have a larger cash position to help us survive longer in tough patches as they come along. 

My thoughts