Financial Advice During Recession Talk

By Denise Jackson

July 15, 2010 Updated Feb 14, 2008 at 8:50 PM CDT

Federal officials say the economic outlook in the U.S. has gotten worse due to the housing and credit crises.

Talk of a recession has many people wondering whether or not to spend money.

A.G. Edwards financial advisor Steven Houlihan says making rash financial decisions during an economic downturn is not the smartest thing to do.

Houlihan said, "During times of recession fear is alive and well and if you let fear make the investment decisions for you or change your portfolio in my 15 years here at A.G. Edwards history shows and tells me that clients will look back and regret that they let fear force them out of a good solid investment.

Houlihan says he thinks we're at the bottom of the economic slump that federal officials are talking about..and if Central Illinois is suffering a recession it could be over by summer.

Twice already the Federal Reserve lowered interest rates and now the chairman is talking about doing it again to try and boost the economy.

Semi-retired Caterpillar engineer George Josenhans is a client of A.G. Edwards. Josenhans says his daily necessities like food are not affected by the economy, but he's watching it closely.

He said, "When we consider major purchases appliances for the home, a car or something which we are, we kind of step back a little bit and decide maybe we should wait a few weeks, see how this all shakes out."

Josenhans says he'll continue to watch the makets closely, hoping things shake out quickly.

Houlihan says if your investment objectives have not changed and you are growing a portfolio buying mutual funds might be a good thing to do during economic slumps because prices are cheaper.

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