terça-feira, 25 de novembro de 2008

How to Survive a Recession

7 Ways To Recession-Proof Your Life
Tuesday November 18, 11:09 pm ET

Amy Fontinelle



Are you worried about how a recession might affect you? You can put your fears to rest because there are many everyday habits the average person can implement to ease the sting of a recession, or even make it so its effects aren't felt at all. In this article, we'll discuss seven ways to do just that.

No. 1: Have an Emergency Fund
If you have plenty of cash lying around in a high-interest, Federal Deposit Insurance Corporation (FDIC)-insured account, not only will your money retain its full value in times of market turmoil, it will also be extremely liquid, giving you easy access to funds if you lose your job or are forced to take a pay cut. Also, if you have your own cash, it won't be an issue if other sources of backup funds dry up, such as a home equity line of credit.

No. 2: Always Live Within Your Means
If you make it a habit to live within your means each and every day, you are less likely to go into consumer debt when gas or food prices go up and more likely to adjust your spending in other areas to compensate. Debt begets more debt when you can't pay it off right away - if you think gas prices are high, wait until you're paying 29.99% annual percentage rate (APR) on them.

To take this principle to the next level, if you have a spouse and are a two-income family, see how close you can get to living off of only one spouse's income. In good times, this tactic will allow you to save incredible amounts of money - how quickly could you pay off your mortgage or how much earlier could you retire if you had an extra $40,000 a year to save? In bad times, if one spouse gets laid off, you'll be OK because you'll already be used to living on one income. Your savings habits will stop temporarily, but your day-to-day spending can continue as normal.

No. 3: Have More Than One Source of Income
Even if you have a great full-time job, it's not a bad idea to have a source of extra income on the side, whether it's some consulting work or selling collectibles on eBay. With job security so nonexistent these days, more jobs mean more job security. If you lose one, at least you still have the other one. You may not be making as much money as you were before, but every little bit helps.

No. 4: Have a Long-Term Mindset With Investments
So what if a drop in the market brings your investments down 15%? If you don't sell, you won't lose anything. The market is cyclical, and in the long run, you'll have plenty of opportunities to sell high. In fact, if you buy when the market's down, you might thank yourself later.

That being said, as you near retirement age, you should make sure you have enough money in liquid, low-risk investments to retire on time and give the stock portion of your portfolio time to recover. Remember, you don't need all of your retirement money at 65 - just a portion of it. The market might be tanking when you're 65, but it might be headed to Pamplona by the time you're 70.

No. 5: Be Honest About Your Risk Tolerance
Yes, investing gurus say that people in certain age brackets should have their portfolios allocated a certain way, but if you can't sleep at night when your investments are down 15% for the year and the year isn't even over, you may need to change your asset allocation. Investments are supposed to provide you with a sense of financial security, not a sense of panic.

But wait - don't sell anything while the market is down, or you'll set those paper losses in stone. When market conditions improve is the time to trade in some of your stocks for bonds, or trade in some of your risky small-cap stocks for less volatile blue-chip stocks. If you have extra cash available and want to adjust your asset allocation while the market is down, however, you may be able to profit from infusing money into temporarily low-priced stocks with long-term value.

The biggest risk is that overestimating your risk tolerance will cause you to make poor investment decisions. Even if you're at an age where you're "supposed to" have 80% in stocks and 20% in bonds, you'll never see the returns that investment advisors intend if you sell when the market is down. These asset allocation suggestions are meant for people who can hang on for the ride.

No. 6: Diversify Your Investments
If you don't have all of your money in one place, your paper losses should be mitigated, making it less difficult emotionally to ride out the dips in the market. If you own a home and have a savings account, you've already got a start: you have some money in real estate and some money in cash. In particular, try to build a portfolio of investment pairs that aren't strongly correlated, meaning that when one is up, the other is down, and vice versa (like stocks and bonds).

No. 7: Keep Your Credit Score High
When credit markets tighten, if anyone is going to get approved for a mortgage, credit card or other type of loan, it will be those with excellent credit. Things like paying your bills on time, keeping your oldest credit cards open, and keeping your ratio of debt to available credit low will help keep your credit score high.

Conclusion

The best part about these habits is that they won't only serve you well during times of recession - they'll serve you well no matter what's going on in the market. But if you implement these financial strategies, a recession is less likely to have a significant effect on your financial situation.

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Anônimo disse...

10 Best Bets for Black Friday
By Nick Mokey,

Digital TrendsIt takes some pretty spectacular deals to pry Americans out of their recliners late every Turkey Day and send them out into blistering cold parking lots to camp for hours, but retailers have it figured it out with Black Friday. And if you're looking to score a big-screen TV for half of what it normally runs for, get a printer bundled with your camera for free, or pick up an MP3 player for the cost of a cup of coffee, you'll be out there too.

With the economy forcing consumers to pinch their pennies even more this year, and retailers trying even harder to open those cautiously held wallets, the deals are ripe for the picking. Here are a few of our favorite picks for this year.

Tom Tom One Third Edition Nav System
$69.99 at Pep Boys

Just like last year, Pep Boys remains the place to go if you're looking for the absolute cheapest GPS system out there on Black Friday. Though the price drop from last year isn't earth-shattering, the good news is that you're actually ending up with a respectable name brand unit this year. TomTom's One v.3 may be a no-frills system, but it's compact, it's in color, and it works.

HP Pavilion G50-112NR Notebook
$349.99 at Office Depot

Though some people will be disappointed that the price on budget notebooks hasn't seemed to budge much further south this year, the hardware you get for the price has taken a huge leap forward. For the first time ever, $350 will buy you a notebook that not only has a dual-core Intel processor, but 3GB of RAM as well, which should be more than adequate for most peoples' needs. And though it's an obscure sale model, it carries the HP name as well.

Panasonic 42-inch 1080p VIERA Plasma HDTV
$899.99 at Circuit City

Skip all the ultra-budgets sets with names you've never heard of, and bag this model (which is bound to be a lot less disappointing in two months) instead. At $400 off MSRP, you're still getting a huge discount, but with a much better quality TV. Panasonic's plasma TVs are renowned for their black levels, and this particular set has received great reviews.

Magnavox NB500MG9 Blu-Ray Player
$128 at Wal-Mart

Nearly a year after HD-DVD bit the bullet, Blu-Ray players are finally falling out of the hands of the home theater elite and into commodity territory. For $128, pretty much anyone with the change for a 1080p television should be able to pick one of these up. It might not be quite as sleek or feature-laden as players twice and three times as expensive, but unless you bust out test patterns and start pulling side-by-side characteristics, most users will never be able to tell the difference.

Nikon Coolpix P60 + Epson Workforce 30 Inkjet Printer
$119.99 at OfficeMax

A respectable camera and respectable printer for less than what one alone should cost? Sold. If you know someone who loves taking photos but hasn't gone digital yet because they want them all printed out, this is your chance to give them the whole package on the cheap.

Mio Moov 500 GPS
$149.99 at RadioShack

For those who would like more features than the rock-bottom TomTom GPS offered at Pep Boys, this Mio offers a significant step up. It has a much larger 4.7-inch screen, text-to-speech capability for spoken street names, and 3.5 million points of interest. Mio systems consistently offer a great blend of function and affordability — and even more so when you can snag one for $100 off retail price.


Guitar Hero World Tour Guitar Bundle for Wii
$69.99 at Target

Hot game, hot price. You won't see the same game any cheaper this holiday season, or likely for a long time to come. If you've been holding out on the whole Guitar Hero phenomenon, here's your chance to get in for far less than everybody else paid.

Acer 22-inch LCD Monitor
$129.99 at Office Depot [AL2216Wbd]

Whether you're still clinging to that old CRT and waiting for LCDs to come down in price, or just need to upgrade from the 17-incher that came with your PC, the price is right for 22 inches of glorious desktop space. This one has solid stats, including 1680 x 1050 resolution and 5ms response times, and has received generally positive reviews, too. Already own a huge monitor? How about dual display? Triple? C'mon...


Aiptek A-HD 8-Megapixel Camcorder
$79.99 at Walgreens

You're not going to shoot the next Star Wars on here, but for what it is, it's hard to argue with such an inexpensive and compact camcorder. Just pop in an SD card (if you don't have one, they can be had for practically nothing in other Black Friday sales and elsewhere) and you're good to shoot 720p high-def video at 30 frames per second, and 8-megapixel stills. At this price, you can get one for the kids, one to shoot those slightly precarious extreme sports videos that end up on YouTube, and one to duct tape to the dog.

HP AMD Phenom X4 Quad-Core System
$599.96 at Best Buy

Notebook computers seem to sop up the majority of attention on Black Friday, but this happens to be one powerful and well-accessorized desktop for the money. Under the hood, you'll find a AMD Phenom X4 Quad-Core processor clocked at 2.2GHz, 6GB of DDR2 memory, and a 640GB hard drive. Add to that a 21.6-inch display and Canon inkjet printer, and you have $1089.96 worth of PC for almost half the price.

mirian disse...

WASHINGTON – Most Americans sorely knew it already, but now it's official: The country is in a recession, and it's getting worse. Wall Street convulsed at the news — and a fresh batch of bad economic reports — tanking nearly 680 points. With the economic pain likely to stretch well into 2009, Federal Reserve Chairman Ben Bernanke said Monday he stands ready to lower interest rates yet again and to explore other rescue or revival measures.

Rushing in reinforcements, Treasury Secretary Henry Paulson, who along with Bernanke has been leading the government's efforts to stem the worst financial crisis since the 1930s, pledged to take all the steps he can in the waning days of the Bush administration to provide relief. Specifically, Paulson is eyeing more ways to tap into a $700 billion financial bailout pool.

On Capitol Hill, House Speaker Nancy Pelosi, D-Calif., vowed to have a massive economic stimulus package ready on Inauguration Day for President-elect Barack Obama's signature.

That measure — which could total a whopping $500 billion — would bankroll big public works projects to generate jobs, provide aid to states to help with Medicaid costs and provide money toward renewable energy development. Crafting such a colossal recovery package would mark a Herculean feat: Congress convenes Jan. 6, giving lawmakers just two weeks to complete their work if it is to be signed on Jan. 20.

President George W. Bush, in an interview with ABC's "World News," expressed remorse about lost jobs, cracked nest eggs and other damage wrought by the financial crisis. "I'm sorry it's happening, of course," said Bush. The president said he'd back more government intervention.

None of the pledges for more action could comfort Wall Street investors. The Dow Jones industrials plunged 679.95 points, or 7.70 percent, to close at 8,149.09.

It was another white-knuckle day, punctuated by grim economic reports. An index of manufacturing activity sank to a reading of 36.2 in November, a 26-year low, the Institute for Supply Management reported. Construction spending fell by a larger than expected 1.2 percent in October, the Commerce Department said.

Adding to the gloom, the National Bureau of Economic Research, a group of academic economists, concluded Monday that the country has been suffering through a recession since December 2007.

With NBER's decision, the United States has fallen into two recessions during Bush's eight years in office. The first one started in March 2001 and ended in November of that year.

The economy jolted into reverse in the final three months of last year. After a short spring rebound, it contracted again in the summer. Economists say it is still shrinking and will continue to do so through at least the first quarter of next year.

Unlike past recessions, consumers are bearing the brunt of this one. Clobbered by job losses, hard-to-get credit and hits to their wealth from sinking home values and plunging portfolio investments, consumers have cut back sharply on their spending, throwing the economy into chaos.

Watching customers' appetites wane, employers have throttled back on hiring. The unemployment rate in October zoomed to 6.5 percent, a 14-year high. So far this year, 1.2 million positions have disappeared. The jobless rate is likely to climb to 8 percent or higher next year.

Against that backdrop, many economists believe the current recession will be the worst since the 1981-82 downturn.

To help ease the pain, Bernanke said additional interest-rate cuts are "certainly feasible," but he warned there are limits to how much such action would revive the economy, which is likely to stay mired in weakness well into next year.

The Fed's key interest rate now stands at 1 percent, a level seen only once before in the past half-century, and many economists predict Bernanke and his colleagues will drop the rate again at their next meeting on Dec. 15-16.

The Fed can lower its key rate only so far — to zero — and it's getting ever closer. Given that constraint, Bernanke said there are other ways to bolster economic activity.

The Fed, for instance, could buy longer-term Treasury or agency securities on the open market in substantial quantities, he said. This might lower rates on these securities, "thus helping to spur aggregate demand," Bernanke said.

Because the Fed can go only so low in reducing interest rates, the central bank over the past year has resorted to a flurry of other radical and often unprecedented actions with the hope of busting through credit jams and getting financial markets operating more normally.

The bracing impact of the Fed's aggressive rate reductions, however, has been somewhat stymied by the credit and financial crises, Bernanke said. Despite lower borrowing costs, skittish banks have been reluctant to lend money to people and businesses, a vicious cycle that has seriously hobbled the U.S. economy.

"Even if the functioning of financial markets continues to improve, economic conditions will probably remain weak for a time," Bernanke warned.

Paulson, meanwhile, has been working closely with the incoming administration, including New York Fed President Timothy Geithner, Obama's pick to be the next treasury secretary, to pave the way for a smooth transition.

"We are actively engaged in developing additional programs to strengthen our financial system so that lending flows into our economy," Paulson said, referring to tapping the $700 billion bailout fund. "When these programs are ready for implementation, we will discuss them with the Congress and the next administration," he added.

Paulson did not provide specifics on what type of programs the administration was weighing other than to say that it was looking at ways to boost capital injections into financial institutions.

___

Associated Press Writers Andrew Taylor and Deb Riechmann contributed to this report.

Anônimo disse...

http://www.usatoday.com/news/nation/2008-12-10-corruptstates_N.htm?se=yahoorefer

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