The fear of a 2023 Recession is growing… This is my plan:

There is a growing sentiment on social media & with stock market analysts that a recession in 2023 is imminent. They are calling for a crash to come in the market soon. According to the old definition of a recession, we may already be in one. Data points are signaling a possible recession on the horizon. Rather than freaking out & making quick (& not smart) decisions with my investments, this is my plan, whether or not we see a recession in 2023.

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My 2023 Recession Plan:

If you have been following me for longer than 1 day, you probably have guessed my plan. But my strategy, whether or not we get a recession, is very simple:

• I will continue to buy every single week.

  • Each week I put the same amount into stocks & ETFs that I believe in for the long term (I post my weekly buys at the bottom of this newsletter). M1 Finance is a great long term investing platform which automatically pulls money from my account each week & invests it for me. I simply DCA (dollar cost average) into my investments. Some weeks I may buy higher, some weeks I will buy lower. But over the long run, it will all average out & I will be sitting in a good spot with my investments. Time IN the market beats timing the market.

• I understand bear markets are normal, but they also don’t last long (compared to bull markets).

  • There was a study done that looked at stock data from 1926-2018. The study found that, on average, a bear market (stocks being down) last for 1.25 years & brings a loss of ~31%. In contrast, on average, a bull market (stocks going up) lasts for 4.25 years & brings a gain of ~175%. What does this tell me? While these are just averages, bull markets last longer & bring greater returns than bear markets. SO, in a bear market (or recession), there are great opportunities to buy quality stocks & ETFs while they are down. (see image below)

• Stay informed with what is going on.

  • I believe it is important to be an informed investor. I am not saying you have to watch CNBC all day every day. I am not saying you have to do what Jim Cramer says to do (actually, don’t do that). What I am saying is stay up to date with what is going on. This isn’t to let fear drive your decisions, rather it is so you can make informed decisions. If you have no idea why the financial sector is taking a hit right now, that could cause you to fear sell. But, if you are following the news & understand the reason why it is (Silicon Valley Bank failure, Signature bank failure, Credit Suisse issues), this helps you make INFORMED decisions with your money.

• Think long term

  • Especially in times when the market is down, it can be easy to not think long term. It can be easy to think “Oh, this time it is different. This time the market will not recover. This time the market will crash for good”. While it is not fun seeing my investment account down in the last year, I stick with this mindset: Red = Opportunity to buy more for the long term. Since I have that mindset, when the market is down in the short term, it presents opportunities to buy more for cheaper. Because I am investing for 10+ years, this allows time for my money to recover + allows me to buy the sale we are getting now & may keep on getting in 2023.

My Buys This Week:

This week I did my normal buys like always. Just like stated above, I keep my strategy simple, yet effective. DCA, buy weekly, don’t overthink, don’t try & time the market. Just buy.

ETFs: $500 in VOO (it is my birthday tomorrow, so upped the buy🎉) + $100 in SCHD (from options income) +

Individual Stocks:

Tweet of the Week:

I asked my community which ETF they would buy forever, if they could only buy 1 from this list. Reply to the tweet letting me know which ETF you would buy:

Thank you so much for reading & I will see you next week! Until then, keep buying assets & stacking those dividends. 🙂 

- Decade Investor