How are you preparing for the next downturn? Are you increasing your fixed inxome allocation already or are you not making any major changes?
I haven't made any major changes. I stopped putting new money into P2P but not that recently. I've been holding some cash and keep legging in to my existing ETF positions.
Sam wrote a great article How To Make Lots of Money During The Next Downturn that you'll like. My favorite tips from it that I've been utilizing with my own investments are being at least neutral (my approach is to lean more neutral but I probably won't be fully neutral), and to go long US Treasuries.
Here's the URL you can copy to a new browser: https://www.financialsamurai.com/how-to-make-lots-of-money-during-the-next-downturn/
For me, it's more about what I haven't done. I haven't bought a new car and have stayed in a pretty small, but affordable, house that my husband and I could afford on one income if one of us lost our job. Still contributing the same amount to my TSP (which is the governments form of a 401k). Just today a home that we have always admired went on the market, I felt the urge to go to see it. My husband had to help snap me back in to reality, sometimes it's hard to fight the old habits.
CD's are starting to look more appealing. KSState has a 5 year at 3.35%. I did a ladder CD there that is averaging about 2.88% right now using even amounts in 1-5 years.
Just saw that NASA Credit Union has a 15 month at 3.25%.
I'm aggressively accumulating as much cash as possible from my cash flow, and being very opportunistic during any sell-offs in the stock market. Overall, my public investment exposure is about 60/40 stocks/fixed income.
Because I sold a SF rental house in 2017, I reduced debt by $815,000. This move alone, makes me feel better about any slowdown, b/c real estate is so illiquid when the mood sours.
Get your cash and debt levels right, and you'll do much better in a slowdown.
We've built up a cash cushion within our rollover IRA to cover three year's worth of our typical expenses. (We have a separate pot of non tax deferred invested money from an inheritance to fund our international travel over the next couple years.)
For the time being, we are also placing our dividends and capital gains into the cash bucket of our rollover IRA rather than reinvesting them back into the investment funds from which they are generated. This may be a mistake, but we are both nervous about the state of the market.
We have no car payment, and no plans to replace my 2010 Nissan Versa. Hubby's pension and Social Security cover the mortgage on our primary residence, and our tenants cover the mortgage on our rental property. Both of these mortgages are 15 year loans, so I suppose if things got really desperate we could always refinance back to 30 year loans, although things would have to be really bad for hubby to consent to doing so! We have cash on hand in allocated savings accounts to cover the carrying costs (i.e., homeowner's insurance, landlord's insurance, property taxes) of these two properties.
There's a pot of fixed income investment money in my 401k that could be accessed, although those funds have been earmarked for future assisted living costs if needed. Things would have to be really bad for me to tap into these funds!
Keeping debt at 1% of yearly gross income. Look for value in the stock market and hold cash.