Sometimes a recession can mean a loss of employment. Raising cash is a preventive measure. You do not need to keep it in cash. For example, say you have $100K in cash you could invest it in a 5 yr GIC at 5% and consider that emergency fund. If ever you need cash in an emergency you could always borrow up to $100K using the GIC as collateral. As long as having your money locked for 5 years suits you. It is always nice to have a cushion for emergency.localAlberta wrote: ↑ If I think a recession is likely, what should I do? Should I sell etfs and stocks?
I have about $40k invested in index funds (XIC and XEQT split evenly) across my TFSA and RRSP and about $10k in other stocks, mostly Canadian dividend stocks, a few US companies.
About $10k in cash in HISA and 1yr GICs.
Bought a home in the summer and have two inexpensive rental condos that are just barely cashflowing, but I doubt I could sell them right now without taking a big hit. Steady job with a pension but not taking home as much as I could be if I switched employers.
Should I go more or less cash? Short the entire market? If I'm pretty sure a recession will happen, how does a person best take advantage of that? Thank you for your thoughts.
In my mind this should be your priority number one. In regards to the stock market, to me it's business as usual. I don't let events dictate how I invest. I'm buying stocks, not the whole stock market.
A special hello to Gabrielle P. who has been reading all the posts I made under my old account since I started posting in 2018. And also hello to Melanie G. - no one is above the law.