Recessions have been part of our life seen time immemorial and boom and bust cycles keep repeating. It’s just that the intensity and frequency changes. As recessions can never be completely avoided we are once again faced with another recession. What makes this particular situation more alarming is that the existing problems of banks faltering, global trade wars, rising debt levels have been made much worse with the unexpected Coronavirus pandemic. It is still not clear how bad this recession will be at it’s peak and how long will it last. Nobody can predict that with absolute certainty but what we can do is prepare ourselves to embrace the impact so the damage is minimal and if possible even beneficial.

To handle the recession there can be different approaches which will suit us depending on our personal situation, risk appetite. They are broadly speaking Defensive Strategy, Aggressive Strategy and Strategy.

• Defensive Strategy- This strategy is particularly suitable for people who have a lot of liabilities, dependencies, personal & financial constraints. This can be home loan, car loan, education loan, credit card dues, financially dependent family members. Here risk minimization is the key. You need to ensure you have a safety bucket to cover your expenses and installments due for 6 months stored safely in a liquid form. This can be in the form of cash, savings account, debt bonds or fixed deposits. Crytpo investments should be only made with the extra savings you are able to make on top of your safety basket and monthly installments. Crytp oassets should include a portfolio which consists 70-75% of reliable coins like Bitcoin and Ethereum and 20-25% in stablecoins which can be encashed in case of urgent needs.
• Aggressive Strategy- This strategy is well suited for people who don’t have recurring liabilities or already have made provisions to more than cover their recurring dues. People who follow this approach have been planning months even years in advance to a recession. They have been piling their savings aggressively which will now be invested heavily in crypto – 30-40% in Bitcoin and Ethereum, 30-40% in Altcoins which they have researched previously for long term prospects which will include Tezos, Cardano, BAT, Kyber, Dash, Monero depending on personal preferences, 20-30% in stablecoins which can be adjusted back to BTC or Altcoins later if required. During the initial phases of recession they will invest their saving pool in a phased systematic manner to their preferred coins. If the recession continues for a long period of 1-2 years or even more they will keep ramping up their crytpto investments on a monthly basis. They say the highest number of millionaires are made during recessions. I truly feel the next batch of future millionaires will be made by people who are able to drive their savings in crypto during this recession period
• No Strategy- This is the worst strategy which is unfortunately followed by a vast majority. They just panic during the recession and do not take any action to manage the situation better. Pick the aggressive or the defensive approach depending on your preference but under no circumstance be caught like a sitting duck doing nothing.

Personally speaking I had been expecting a recession in 2020 since early 2019 but what I did not expect the global magnitude made worse by the COVID situation.  

If you have been following the global news about financial indicators and geo-political issues it is impossible that you were shocked by this recession.

I follow Marko on youtube as I think his financial strategies are really well structured. He is more focused on stocks but I think his approach works well when applied to crypto as well. He had made a video in Aug 2019 when he first predicted a recession in 2020. I had started saving aggressively since I watched this video- https://www.youtube.com/watch?v=jvymyRS0Vug&t=475s

What we need to be very careful during this phase is the whale manipulation which will make any unstructured investments highly risky so always phase your investments across dips and don’t go all in at one time.

I had written this article regarding how to spot a whale manipulation - https://www.publish0x.com/crypto-projects-sams-reviews/bitcoin-bull-trap-alert-xoerlx

I am expecting the whales to crash the crypto market during the next 1-2 weeks so watch out for that.

I will repeat like always that if you do decide to invest in crypto please do your own research before putting your hard earned money in any token.

STAY SAFE! From Coronavirus and from Bitcoin Whales!

Cheers,

SamBTC

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Originally posted on Uptrennd by me at - https://www.uptrennd.com/post-detail/recession-2020-what-s-your-strategy~MjUzMTM4