The Impending Recession, Or Depression?

With the new administration slashing and cutting jobs, thus (in their eyes) saving much needed federal funds. Either way, what they are doing is rather extreme. If you’re all for it, then you hope this will save the American taxpayer thousands of dollars? Or, maybe we’ll get a check in the mail, depending on what tax bracket you’re in…

Personally, I’m not so much into such drastic cutting and shutting down of federal agencies.

1. This is a bit too quick in my humble opinion, since in reality, I would rationalize that it would take months to properly assess each federal agency. To just quickly slash and cut seems rather drastic and overtly quick. I’m supsicious.
2. With thousands of federal jobs being cut, this means that the jobless claims will go up, and this will affect the performance of the stock market, at the least.

Will There Be Another Recession?

It’s a given. There WILL be another recession. When? Who knows. But already the analysts are predicting one based on the current actions of our current government and what’s happening around the world.

We are a global economy, so what happens in the US affects everyone around the world, being that we are the biggest economy. So, trade tariffs will affect us, the consumer, and thus affect the bottom line of many of our US companies, from energy to retail to tech.

Already, META is laying off 5% of its workforce, and other companies are downsizing a bit to prepare for a recession. Which means more people on the unemployment lines. And right now, inflation is ramping up.

So, it would be wise to anticipate a recession if you are an investor.

We’ve been flirting with all-time highs since 2024, and in the first quarter of 2025, there are signs out there and with the actions of our current administration, it would seem that the powers-that-be are inducing one, a recession that is… but, with these all-time highs, there is a point where things will go down eventually.

What to Do?

Personally, I’ve scaled down my portfolios, and I’ve sold stocks for profit, keeping cash ready for buying at discount values. Also, getting out a bit from the stock market is wise to avoid losses when the stock market tanks.

I always keep a certain amount of cash to buy new positions, anyway. But with the current situation, the more the better.

At the very least, exercise a strategy of caution in the coming months.

Without trying to be politically biased, the fact remainds that during Republican administrations, there have been downturns in the economy and the stock market.

1. 1929 – the Great Depression, tariffs
2. 1970s – oil embargo, stagflation
3. 1980s – the savings & loan crisis, black monday.
4. 2000s – the financial and housing market crises of 2007-2008.
5. 2018 – a fourth quarter recession
6. 2020 – stock market crash (covid pandemic)

In another Republican administration, it’s best to exercise caution in the next four years.

If I had to invest in certain sectors? Credit Card companies would be a good idea. The Magnificent 7 tech companies would be a good one, too. Just research companies with the best track records during troubled economic times, but with that last market crash in March 2020, everything tanked.

Just don’t lose money. Great companies will survive the tough times.