7 Ways To Position Yourself For Recovery


In a gloomy economic marketplace, it's easy to have a negative outlook on the future. Many become worried about the state of the economy and simply focus on surviving and staying afloat amidst the uncertainty.

What many of us forget is that economies recover, although we rarely know when. But if you prepare yourself for the road ahead, your financial outlook for the new economy will leave you sitting pretty.

Know Your Time Horizon

It's important to make sure your investment goals are aligned with your investment time horizon. Reviewing your investments and making sure that those investments are still appropriate for the stage of life you are in or will soon be entering is extremely important.

Individuals approaching retirement will have much different needs from their investments than young graduates just entering the work world. Aligning your goals with your investments is fundamental to being a successful investor. (To read more on investing for your time horizon read The Seasons Of An Investor's Life.)

Lock In Low Rates

During times of economic uncertainty, it is not uncommon for interest rates to drop to very low levels. At times like this, it can be in your best interest to take advantage of lower interest rates, especially for homeowners. Locking in at a low interest rate for five or 10 years can save mortgagors thousands of dollars over the course of their mortgage.

Even if you are locked in at a higher rate already, you might still come out on top by remortgaging at a lower rate, even after paying penalties associated with renegotiating that rate. Weighing all your options to make the best decision can really pay off. (For more on locking in low mortgage rates, see Got A Good Mortgage Rate? Lock It Up!)

Pay Down Debt

It can be easy to run up a big debt load when the economy is not cooperating, but this is not a smart move in any economy. Instead, take advantage of the economy. Typically, low interest rates can help you pay off your debts more quickly, as more of the payment will go to principal rather than interest.

Paying off high-interest debt, such as credit cards, should be the first priority for people during uncertain economic times. Carrying balances on high-interest debt vehicles can make it very difficult to build savings when the economy turns around. (To read about debt consolidation, see Debt Consolidation Made Easy.)


We've all heard the old phrase "don't keep all your eggs in the same basket". This old adage couldn't be more true when it comes to your investments. Keeping a diversified portfolio of investments protects your nest egg from risks that can ravage your portfolio.

It's no coincidence that the professional money managers who are constantly preaching to investors about diversification are the same ones who tend to escape market downturns and negative economic news in a far better position than those who don't. (To learn more about diversification read, The Importance Of Diversification.)

Make A Budget

It's hard to believe that many people still do not take the time to create a budget. For those who have refused to sit down and take an objective look at their spending habits in the past, there is no better time than during an uncertain economy. Simply sitting down and comparing spending habits to the amount of money you have to spend can be a real eye-opener.

Quite often it can be easier to ignore the obvious or put off financial planning for another day. However, by knowing your financial situation and knowing steps you need to take to achieve your goals, you can put yourself on the path to a positive and successful financial outlook. (For more insight, read The Beauty Of Budgeting.)

Don't Go It Alone

It can be difficult to make a financial game plan when you don't have the slightest idea about personal finance. Fortunately, you don't have to go at it alone. Talk to your financial planner, and if you don't have one, go get one. Financial planners are trained professionals and personal finance is their forte.

A financial planner can help you set up a financial game plan and make sure that you stick to it. Take the time to meet a few financial planners and get a feel for them as people. You should be 100% comfortable dealing with the person who will be helping you handle your finances. (Find out more in Shopping For A Financial Planner.)


Don't let tough economic times get thet best of you. Feeling stressed about money is an issue for everyone, but worrying about things that are out of your control only adds to your stress. By putting a smile on your face and living your life with passion and enthusiasm, you'll find that the everyday stresses of life won't bother you the way they used to.

By using the tools we've discussed here, you can put yourself in a position to be financially confident in your future prospects when bad economic times turn around.
Related Articles
  1. Investing

    How ETFs May Save You Thousands

    Being vigilant about the amount you pay and what you get for is important, but adding ETFs into the investment mix fits well with a value-seeking nature.
  2. Bonds & Fixed Income

    High Yield Bond Investing 101

    Taking on high-yield bond investments requires a thorough investigation. Here are looking the fundamentals.
  3. Professionals

    How to Protect Your Portfolio from a Market Crash

    Although market crashes are usually bad news for your portfolio, there are several ways to minimize losses or even profit outright from market movement.
  4. Retirement

    How Robo-Advisors Can Help You and Your Portfolio

    Robo-advisors can add a layer of affordable help and insight to most people's portfolio management efforts, especially as the market continues to mature.
  5. Mutual Funds & ETFs

    Top 3 Muni California Mutual Funds

    Discover analyses of the top three California municipal bond mutual funds, and learn about their characteristics, historical performance and suitability.
  6. Stock Analysis

    The 5 Biggest Russian Oil Companies

    Discover the top Russian oil companies by production volume and find out more about their domestic and international business operations.
  7. Investing Basics

    3 Key Signs Of A Market Top

    When stocks rise or fall, the financial fate of investors change, as well. There are certain signs that can reveal a stock’s course, and investors don’t need to be experts to spot them.
  8. Professionals

    How to Sell Mutual Funds to Your Clients

    Learn about the various talking points you should cover when discussing mutual funds with clients and how explaining their benefits can help you close the sale.
  9. Professionals

    Fund and ETF Strategies for Volatile Markets

    Looking for short-term fixes in reaction to market volatility? Here are a few strategies — and their downsides.
  10. Investing

    How Diversifying Can Help You Manage Market Mayhem

    The recent market volatility, while not unexpected, has certainly been hard for any investor to digest.

You May Also Like

Hot Definitions
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  2. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  3. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  4. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  5. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  6. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!