Parents of infant who died in wrong-way crash on Ontario's Hwy. 401 were in same vehicle
Ontario’s Special Investigations Unit has released new details about a wrong-way collision in Whitby on Monday night that claimed the lives of four people.
Red-hot inflation has been the story of 2022, and the BoC is stuck between a rock and a hard place - trying to control inflation by raising interest rates, which then runs the high risk of an economic downturn.
Although there may be a chance that we don’t enter into a recession and the BoC is still hoping for a soft landing, it’s best to be prepared.
When many people think of a recession, they may recall the global financial crisis that occurred in 2008, and the ensuing chaos. Recessions aren’t always this dramatic, though, and can vary in severity.
There are many different definitions of what a recession is, but a simple one is given by the National Bureau of Economic Research (NBER):
A recession involves a significant decline in economic activity that is spread across the economy and lasts more than a few months. It can affect several aspects of the economy, such as real GDP, income, industrial production, employment, retail sales, and industrial production.
GDP is an important indicator of where the economy is potentially heading. Current statistics show that Canada’s GDP is very close to stalling and has moved very little recently (0% growth between April 2022 – May 2022).
Recessions aren’t just bad for businesses; they’re bad for everybody. During a recession, it’s common to see rising costs paired with job cuts, pay cuts, stock market drops, and reduced income security.
It’s a good idea to start preparing for a recession now so you aren’t caught off-guard. Here are some practical tips that you can employ to make sure you’re ready for the oncoming market downturn.
1. Evaluate your current investments
The main question you should be trying to figure out when looking at your investments is: “How much risk am I exposed to?” Depending on where your assets are held, try to get a total view of what you have and what your potential losses could be. You might need to look at your self-directed financial statements, contact your financial advisor, or evaluate your pension plan at work.
This will have a lot of variation among different people. For example, if you've invested in 100% Canadian equities, look at worst-case scenarios, such as during the 2008 financial crisis when the TSX Index dropped by 35%.
The next question you should ask yourself is, “Am I willing to accept this risk?” If the answer to that is no, then it means your risk tolerance potentially does not properly match your investments and that you might consider adjusting it. Some de-risking strategies are investing more in fixed income, cash, or equities in more stable sectors (such as utilities).
If you’re unsure what your current risk tolerance is, consider doing an investor questionnaire.
2. Reduce your monthly expenses
When a recession hits, the first thing businesses do is reduce their overhead costs. They may cut funding to departments, put pay raises on hold, and avoid unnecessary maintenance.
Consider doing the same at home.
First, sit down and look at your monthly budget. It helps to have a full view of all of your family’s expenses, including rent, mortgage, utilities, groceries, fuel, and leisure.
There’s a pretty good chance that you can find some areas where you can cut down on your expenses. Evaluate the big three expenses in your budget: Housing, transportation, and food. See if there’s any way to cut down on any of those areas.
During a recession, there’s a higher likelihood of losing your job. If you own a business, you may find that fewer clients renew their contracts or fewer shoppers buy your products. This can tighten your personal finances and make bills difficult to pay.
During these periods, it’s vital to have an emergency fund. Hopefully, you won’t have to use it. If the worst happens, at least you’ll have it there to help you make it through unscathed.
3. Build on your most valuable skills
During a recession, it’s important to keep providing value. If you’re an employee, try to hone your skills and become the best at what you do, so you’re the least likely to get let go if there are rounds of layoffs. If you run a small business, focus on being the best in your industry and offer exceptional service to your clients.
When money is tight, people and businesses will continue investing in people and products that bring them value.
There is no way to exactly predict how long a recession will last, but we can look at the history to give us a rough idea. Canada has experienced only five recessions since 1970, and they usually lasted between three to nine months. Unfortunately, there’s little that any of us can do to prevent a recession. By preparing ahead of time, we can limit a recession's ability to harm us financially.
If you’re smart with your money, increase your value, save where you can, and eliminate unnecessary spending, you’ll be able to survive and potentially even thrive through a recession.
Christopher Liew is a CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers on his Wealth Awesome website.
Do you have a question, tip or story idea about personal finance? Please email us at dotcom@bellmedia.ca.
Ontario’s Special Investigations Unit has released new details about a wrong-way collision in Whitby on Monday night that claimed the lives of four people.
Three men in Quebec from the same family have fathered more than 600 children.
A British Columbia mayor has been censured by city council – stripping him of his travel and lobbying budgets and removing him from city committees – for allegedly distributing a book that questions the history of Indigenous residential schools in Canada.
A spike in impaired driving-related collisions has caused Ontario’s provincial police to begin enforcing mandatory alcohol screening (MAS) at all traffic stops in the Greater Toronto Area -- a move one civil rights group says is ‘not acceptable.’
William Nylander scored twice and Joseph Woll made 22 saves as the Toronto Maple Leafs downed the Boston Bruins 2-1 on Thursday to force Game 7 in their first-round series.
Jurors in the hush money trial of Donald Trump heard a recording Thursday of him discussing with his then-lawyer and personal fixer a plan to purchase the silence of a Playboy model who has said she had an affair with the former president.
Staff at a small southern Alberta office supply store were shocked to find someone had broken into the business last week, but they were even more confused when they discovered the culprit was a bear.
A federal judge on Thursday sentenced a scuba dive boat captain to four years in custody and three years supervised release for criminal negligence after 34 people died in a fire aboard the vessel.
Fake text message and email campaigns trying to get money and information out of unsuspecting Canadian taxpayers have started circulating, just months after the federal government rebranded the carbon tax rebate the Canada Carbon Rebate.
Three men in Quebec from the same family have fathered more than 600 children.
A group of SaskPower workers recently received special recognition at the legislature – for their efforts in repairing one of Saskatchewan's largest power plants after it was knocked offline for months following a serious flood last summer.
A police officer on Montreal's South Shore anonymously donated a kidney that wound up drastically changing the life of a schoolteacher living on dialysis.
Since 1932, Montreal's Henri Henri has been filled to the brim with every possible kind of hat, from newsboy caps to feathered fedoras.
Police in Oak Bay, B.C., had to close a stretch of road Sunday to help an elephant seal named Emerson get safely back into the water.
Out of more than 9,000 entries from over 2,000 breweries in 50 countries, a handful of B.C. brews landed on the podium at the World Beer Cup this week.
Raneem, 10, lives with a neurological condition and liver disease and needs Cholbam, a medication, for a longer and healthier life.
The lawyer for a residential school survivor leading a proposed class-action defamation lawsuit against the Catholic Church over residential schools says the court action is a last resort.
Mounties in Nanaimo, B.C., say two late-night revellers are lucky their allegedly drunken antics weren't reported to police after security cameras captured the men trying to steal a heavy sign from a downtown business.