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Preparing for an Economic Downturn

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Blazen56k

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I run an e-commerce business that is doing well, real well in fact, so it was discouraging to learn about the shut down in China, and the ripples that have come from concern about the Coronavirus. I’m trying to do my best to prepare for what I believe will be a significant downturn in the US economy. For starters, I’m reviewing for expenses that can be cut and looking to reduce my cost per unit. I’ve got great credit but usually run high balances and pay off statements each month to avoid interest, but now I’m considering carrying some of the balances to increase my cash on hand as well as looking into get another SBA loan, as I think credit will tighten up in a downturn.

Are any of you preparing in any way, to either reduce risk or to be in a better position to take advantage of a downturn? If so, do you have any tips you could share?

Thank you!
 

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aeden

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I run an e-commerce business that is doing well, real well in fact, so it was discouraging to learn about the shut down in China, and the ripples that have come from concern about the Coronavirus. I’m trying to do my best to prepare for what I believe will be a significant downturn in the US economy. For starters, I’m reviewing for expenses that can be cut and looking to reduce my cost per unit. I’ve got great credit but usually run high balances and pay off statements each month to avoid interest, but now I’m considering carrying some of the balances to increase my cash on hand as well as looking into get another SBA loan, as I think credit will tighten up in a downturn.

Are any of you preparing in any way, to either reduce risk or to be in a better position to take advantage of a downturn? If so, do you have any tips you could share?

Thank you!
I sold off some of my stock holdings a couple months back in preparation. Liquidity is extremely important in a downturn. All my debts are paid off and I have no intention on taking on any debt. At this point I'm continuing with business as usual, keeping an eye on potential opportunities.
 
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Blazen56k

Blazen56k

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I did the same in terms of exposure to the market, also called some family and friends back on the 19th and suggested they move into treasuries if possible, just until we see what happens. Some actually listened and missed the bloodbath last week...others are still in and waiting on the FED to cut rates. Meanwhile, business is up 20% over normal. I expected to see a spike in Ecom in the beginning as people shop more online than in stores due to concerns about being out in public. I've covered in terms of the absolute worst-case type of thing, but I would really like to see progress on a vaccine so people won't fear going out.

We were in the process of putting our home up for sale and buying something bigger, but I've pumped the brakes on that, while we see how things shake out. But I fired one of my real estate agents (who's only ever sold in the greatest bull run ever), because he attempted to big-league my wife, basically telling her we were stupid for not trying to buy before the FED RAISED rates, and wanted her to have me explain my reasoning to him, because "in his professional opinion, we were making a big mistake". What an idiot. MJ was so right about how important it is to be financially literate so that you can evaluate the advice of advisors. I'm tempted to post what he sent to my wife as a great example of how to be condescending to your client.
 

JScott

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Are any of you preparing in any way, to either reduce risk or to be in a better position to take advantage of a downturn? If so, do you have any tips you could share?
Buying recession-resistant investments, building recession-resistant businesses and hoarding cash.
 

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