3 tips to prepare well for the recession according to Warren Buffett

 In some ways, some international economies are starting to improve, like the US one. However, it is very early to say that the worst of the crisis is over.

Precisely for this reason, even if no one knows whether or not we will be facing a recession, below it is worth reading Warren Buffett's advice to protect yourself from such an eventuality.

Take a long-term view

Nobody knows for sure if a recession is looming on the horizon or how long it will last. But we know that the economy and the stock market will recover in the long run.

Therefore, short-term volatility and the possibility of the economy slowing down and stock prices falling in the coming months should be considered normal. If so, your investments could lose value, but only in the short term.

For example, in 2008, at the height of the Great Recession, Warren Buffett wrote an article for the New York Times explaining that, during the recession, “ companies will actually experience some hiccups in earnings, as they always have. But most large companies will set new profit records in five, ten and twenty years ” .

Invest more!

We know how daunting it can be to keep investing when the future is uncertain, but the current one is certainly one of the best opportunities to buy more!

Although the market has recovered in recent weeks, stock prices are generally still well below the highs reached at the beginning of the year. This means that you will have the ability to stock up on quality stocks at a discount, saving you a lot of money over time.

For example, in March 2009 the S&P 500 hit its lowest point during the Great Recession. But only in the following year it recorded a return of almost 70%… According to Buffett, an important rule to remember when investing is “ to be fearful when others are greedy, and be greedy when others are fearful “. If we are facing a full-fledged recession and stock prices are falling further, this is a chance to "get greedy" and invest as much as you can afford.

Focus on quality investments

The best way to ensure that your investments survive a recession is to fill your portfolio with solid stocks and a long-term view. Not all companies will be able to survive times of economic downturn, but healthy companies have the best chance of seeing steady growth despite volatility.

The above rule - which could be a "good rule" in all situations - is especially important when stock prices are lower ...

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