How a recession can be a GenX girl’s best friend

Down turn markets can be your wealth building BFF

If you listen to the news, a recession is right up there with a nuclear attack, as if we haven’t been through and recovered from multiple recessions.

A recession is typically considered two quarters or 6 months of a downturn GDP. Basically, people are making and buying less stuff.

A recession on average since WW2 lasts about 11 months. The average drop in the market is about 32%. So basically, for about 11 months, your accounts may look like a rollercoaster- operative word, only about 11 months, not forever.

Once the recession ends, the average recovery to get the accounts back to where they were pre-recession is about 4-6 months.

One year after a recession ends, the S&P 500 Fund (think top 500 companies in the us) typically has grown by about 15%. The average overall stock market return is closer to 10%

So, you see, a recession is temporary; historically, we’ve always recovered. So this is an amazing opportunity to get your savings supercharged. Below are some benefits of investing during a recessions:

You can buy investments cheaper.

When there is a drop in the market, you are investing when everything is on sale. You get so much more bang for your buck.

Your investments go up with the market.

A drop in the market over an extended period is how you make money in the market. You are buying investments cheaply over some time. When the market goes back up, your investment goes up, and this is when you can really see the growth.

Take advantage of your 401k

Maximize the benefits of a drop in the market and take full advantage of your 401k plan. Get all the free money your employer is willing to give you to help you retire.

401k Match=Free Money

Contact your 401k plan provider about a " auto-escalate " feature to automatically, and incrementally increase your 401k plan contributions by as little as 1% a year.

If you are concerned about your investments during a drop in the market, review with tools like CNN's Asset Analyzer to help you gauge if your investments match your goals and needs.

Take a "news" fast

Take a break from the news. My friend in the media used to say the mantra of the news is that "if it bleeds, it reads." The media is designed to capture your emotions- do not let yourself get sucked in and make financial d

Get your finances in order.

A drop in the market can be a wealth-building goldmine IF you are financially secure. Financial security is the ability to financially manage the ups and downs of life without getting off track. The last thing we want is for you to have to cash out of your investment to cover an unexpected expense because you didn't have a financial security plan.