Market Update: Global Recession Fears and Why You Should Not Worry!

Over the last five months, all markets (apart from some real-estate/rental markets) have been super volatile, with hopes riding on strong wage growth and unemployment, for the most part, around the world. However, investor sentiment has been down considerably, with most investors becoming more bear like (meaning they are starting to enter a hibernation phase, with less money invested, dragging markets down with them) and markets truly struggling due to high inflation around the world, food shortages, war and lockdowns in China.

Not to mention the likelihood of a de-coupling of economic trade around the world, meaning that countries are starting to wonder whether they are too dependent on other countries for necessities, such as energy, natural resources etc.

We have seen this in regards to China, who have been trying to find other alternatives to Australian iron ore, which has been vastly holding up our economy since 2008. And most of western Europe, who have relied on Russian gas for the last 10-20 years, now needing to find other alternatives due to Russia’s invasion of Ukraine.

Countries are starting to think about worst case scenarios and national security a lot more since the invasion, which will lead to a complete change in some countries policies regarding the economy and trade.

Which could have huge reverberating effects on the global economy as a whole. (Globalisation could have hit a peak potentially)

How does this affect you specifically though?

To be honest, it will only affect you truly if you let it. If you let the drama of the news and the headlines get into your head, if you let the negativity through, it will affect you mentally and emotionally.

Human nature is a funny thing, we are drawn to more negative headlines than we are to positive ones, we have a necessity to know about the bad, and seem to neglect the good.

However, one thing I know for certain is that even if there is a global recession, even if it is worse than the global financial crisis…

Everything will be okay in the end, because no matter how bad it gets, the funny thing that is human nature prevails. As homo sapiens, we hold on to dreams and optimism of the future, for something better for our children and grand children. There are people out there right now, working hard to find better ways for transport, for more environmentally better ways to source and provide power.

We are problem solvers and we are action takers, working towards solving real problems everyday.

Therefore, it doesn’t matter if we do have a global recession, because we will work towards solving that problem, as we do with climate change and working to preserve the environment.

Throughout history, so long as there are humans around, we have seen that humans will work together and hope together to provide a better future, that is why I remain optimistic in every situation. The proof is in the state of the world today, no matter all the issues, such as poverty, famine, disease, war, we have increased the standard of living of every person on this planet so that even the poorest person is living better than their counter-parts were living 20, 30, 50 years ago. (I am not saying that we have fixed the problems around the world, such as poverty or world hunger, just that people are slightly better off across the board, we still have much to do before we can truly say world hunger has been eradicated.)

The darkest night always brings with it a bright dawn, everything moves in cycles, forever repeating history.

So until the day the last human draws their last breath, I shall have persevering optimism, which is why I continue to invest and working towards bettering myself so that I can deal with whatever nights that may plague us in the future, however long or short they are.

Which is what I suggest you do to, do not let the tabloids and the media control your emotions, rather look to what you have control over within your own life. A global recession is far outside of your control, so why worry about it, instead, protect yourself against it.

By developing yourself and making yourself more valuable to the jobs market/community you live in, which will give you the best possible chance if it is a prolonged recession. And the other thing is to make sure you have an emergency fund, where you have up to three to six months of your current wage in cash held in a bank account, just in case the worst does happen.

Just remember though, the worst may never come to fruition, and no one knows whether it will happen or whether everything will rebound again.

Hence why it is a good idea to have optimism and hope for the future, that will get you through each day, but you must also be realistic as well, having that emergency fund will help you sleep when the worst does eventually happen. As it will happen, as it has repeatedly happened through history, and after reading this, I hope you will be prepared for it.

Until next time,

Take Back Control