Recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). The following are how to react when recession is approaching.
Build up your emergency fund:
Put aside a 6-month rainy-day fund.
Do not sell your stocks just because your investments are at a loss:
If you believe in your stocks, do not give up on them so easily.
Stay rational and do not panic:
Try to make the best decision from a logical place.
Load up on some awesome companies:
Now is your chance to create a new watch list of terrific companies that you think will enrich your current collection of stocks.
Look for companies that have bounced back:
If businesses were able to recover after the 2008 recession, they ought to be resilient enough for the current climate, too.