Morning Download from Invincible Money 

Personal finance + economics + markets

Good morning investors! Yesterday’s market wasn’t great, most major indexes fell and cryptos didn’t move ahead despite Target Corp. improving and gaining 2.96% to close at $128.75.

Today we cover:

• A ‘richcession’ may be coming.

• Investors haven’t been this bullish in a long time.

• How to prepare for a recession.

📊 Economy News 

The country to face a ‘richcession’ ?

Despite recession fears, the US economy has grown and fared well. The labor market is strong and the GDP is improving as well.

As a result, a growing number of experts are now predicting a positive outcome as recession fears are beginning to fade.

Most are expecting a soft landing, or a richcession, a new term introduced to the world by Wall Street Journal reporter Justin Lahart.

A new type of recession, it refers to a recession that “disproportionately hurts rich people.” Based on the latest data, it seems that we’re inching towards a richcession. Stats prove that the job losses so far have disproportionately affected white-collar workers and the demand for lower-income groups appears to be outpacing higher-income groups.

Also known as a ‘rolling recession’, if it occurs, it may impact only some industries while others may continue to grow.

🤖 A.I. isn’t helping either, as most of the jobs losing to A.I. are white collar, much to everyone’s surprise.

Quick hits:

• Tesla continues to reduce prices in China.

• Inflation continues to decline in the UK.

• Apple starts manufacturing the next phone in India.

• The UK readies to challenge Silicon Valley.

📈 Stocks

S&P 500 4,406.38 (-0.71%)
DJIA 34,765.64 (-0.52%)
NASDAQ 14,876.47 (-0.71%)
VIX 16.61 (+0.91%)
* Prices as of Aug 17th, 12:20 AM UTC

Investors haven’t been this bullish in a long time

Sentiment among investors appears to be least bearish since February 2022, according to a Bank of America survey.

Cash allocations have fallen to a 21-month low and while investors appear to be preparing for a weak economy, this is the most bullish they have been since February 2022.

About 75% of respondents expect a soft landing and about 45% expect a fall in growth, down from 60% in July.

🔐 Crypto

Bitcoin $29,079.60 (-0.30%)
Ethereum $1,818.49 (-0.44%)
Total market cap $1.15 (-1.11%)
* Prices as of Aug 17th, 12:20 AM UTC

Binance stops offering crypto payment service

Binance has shut down its buy-and-sell service Binance Connect, originally called Bifinity, due to changes in marketing strategy. Launched last year in March, the service failed to achieve its aim of making traditional companies 'crypto ready' and shut down on August 16.

According to the official statement, the company plans to "refocus on its main products and long-term goals."

This is seen as an opportunity for small firms to make a mark. Binance has been on a decline for the last few months, helping small companies such as KuCoin and Huobi increase market share.

💵 Personal Finance

Prepare for a recession

It's important to know how to prepare for a recession (or a richcession). Here are a few tips:

Understand your priorities

You never know what may happen tomorrow, especially during a recession. The best way to prepare for your future is to answer these questions:

• How much money or liquid assets do I have?

• How much money do I owe to others?

• What are my monthly/yearly expenses, including rent, transportation, childcare, insurance, etc.

• Do I have any significant life events coming up in the future, such as a wedding or a baby?

A recession may last from six to 18 months so make sure to plan for the next 18 months at least.

Save some more

Bolster your savings by reducing your expenses and increasing your income. This will ensure you have enough cash to turn to in case of an emergency.

Living within your means is a great way to control your expenses. Also, it might be a good idea to consider some short-term investments so you can continue to have cash during a recession.

Get rid of debt

You don’t want to be in debt when the market’s falling. Hence, plan to get rid of all kinds of debts, including credit card debt. There are a variety of strategies to try:

• Debt consolidation that involves taking out a single, fixed-rate loan to pay off other, high-interest balances.

• Try the debt snowball method, which builds momentum as you begin to pay creditors. It involves getting rid of the smallest debts first so you can stay motivated.

• Next, try the debt avalanche strategy that works just like the snowball method but involves getting rid of the most expensive debt first. This helps reduce the amount of money you're paying in interest.

Know where to invest

Most people have no money to invest during a recession; however, economic slowdowns can offer good investment opportunities. Here are some options:

• Precious metals such as gold and silver tend to perform well during recessions and are easy to invest in. Moreover, you can choose gold ETFs or purchase a gold IRA if you're looking to save for retirement.

• If you have money then consider real estate as housing gets cheaper during a recession. In fact, real estate prices have fallen 4 out of 5 times during the last five recessions. You might be able to get a good house at a 25% discount, thus making a good profit when you sell. Also, not only the price but mortgage rates also decline during a recession,

• Lastly, consider dividend stocks for passive income. It might be a good idea to invest in companies with low debt-to-equity ratios and impressive balance sheets. However, be careful because even the best of companies may report a loss during a recession. Still, to be on the safe side, have a look at this dividend aristocrats list, i.e.: companies that have increased their dividend payouts for at least 25 consecutive years

Check this video for more on how to prepare for a recession:

💰 Be a Better Investor

👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.