The world seems determined to talk itself into a recession. And while there may be good reasons to worry about the global economy right now, don't let all the downturn discussion get to you. The doomsayers have been warning of a recession for years and so far it has been averted.
Jahangir Aka, managing director for the Middle East & Africa at fund manager Neuberger Berman, says central bankers are taking concerted action to prevent a downturn. "The US, Europe, Australia, Japan, India, South Africa and others are all injecting liquidity into markets in a bid to keep the economy humming along," he says. "Nervousness is inevitable at this late stage of the investment cycle, but we still believe in a soft landing."
Even if we do end up with a recession, not every country will be hit equally hard. The UAE's diversified economy gives it protection against a slump in energy prices, which tend to fall as growth slows and demand shrinks.
However, it still makes sense to recession proof your finances, just in case, particularly as one of the worst things that can happen in a downturn is that you lose your job.
Demos Kyprianou, a board member of SimplyFI, a non-profit community of personal finance enthusiasts in the Emirates, says if worried, plan now to make sure your finances can withstand the subsequent drop in income. "Monitor your spending and look for ways to slash costs," he says. "Now is not the time to waste money on things you do not need."
Next, pay down any high-interest debt such as credit cards. "Then build an emergency pot of cash to cover your everyday spending, ideally for six months, to give you time to search for a new job if you lose yours," says Mr Kyprianou.
The most visible sign of a recession is falling stock markets. The Wall Street Crash foretold the depression of the 1930s and the financial crisis saw the Dow Jones lose more than half of its value between October 2007 and March 2009.
Falling share prices will ravage your pension and investment portfolios. While painful for all, it is only a full-scale disaster if you are planning to retire in the next three or four years. To protect yourself, move some of your retirement pot into lower-risk assets such as cash, so you can leave the rest of your money invested and wait for share prices to recover (they always do, given time).
Retirement can now last for more than 20 years, and over such a length of time you cannot afford to ignore stock markets altogether, despite the added volatility they bring.
Mr Aka says those who have no plans to retire for at least another five or 10 years, cannot afford to be out of the market.
Those who have shunned markets in recent years have paid the price in lost growth. "The risk of not investing is too high, but you need to be cautious. I wouldn't go 100 per cent into, say emerging equities right now, you should perhaps review your portfolio and be more conservative,” says Mr Aka.
Vijay Valecha, chief investment officer at Century Financial, says you might also want to increase your exposure to safe haven gold, as the price tends to rise when riskier assets such as shares fall, offsetting your losses. "Also consider low-risk asset classes such as money market funds and government bonds."
Stock market crashes create winners as well as losers. In a crash, good companies tend to fall in value along with the bad, Mr Valecha says: "Investors can take advantage with some careful cherry picking, buying low-priced, beaten down stocks with sound fundamentals, and then waiting for them to recover."
Mr Kyprianou also advises expatriates to consider voluntarily contributing to social insurance in their home country. "That way you may still qualify for full pension and disability benefits if you return home after leaving the UAE."
Remember though that house prices can also crash in a recession, leaving many homeowners and property investors understandably nervous.
However, Chris Battle, who runs The Property Hub Meetup in the UAE, says most have little to worry about in practice. "The market value of any property you own is only important on the day you buy it, and the day you sell or re-mortgage," he says. "Provided you have enough income to meet your regular mortgage payments, its value today is actually irrelevant."
In most cases, you can sit tight and wait for the recovery. This applies to any rental properties you may own, too. "If you have a low-rate mortgage and the debt is being covered by rent from a tenant, there’s little benefit in paying down the debt and tying up your savings, which could be used for other things,” says Mr Battle.
It is more of a problem if you have to move house, although again, not the end of the world. You may get less when you sell, but your new home should be cheaper as well.
Where things do get really tough is if you are forced to sell your property, say, because you have lost your job and cannot afford the mortgage. It gets even tougher if you are in negative equity, and owe more to your mortgage lender than your property is now worth.
So avoid over stretching yourself to buy a property at this point, and try to pay down your debt if too onerous.
If you do get stuck in negative equity, you could always try renting out the property to cover your mortgage repayments, and moving somewhere cheaper yourself. The last recession saw a surge in so-called "accidental landlords" who did exactly that.
Mr Battle says a recession can actually be good news for property investors. "There will be lots of opportunities from owners that have to sell their homes or investments,” he says. “If you have the money, you can pick up a bargain."
Any downturn means lower interest rates for longer. While this is bad news for savers because it means an even lower return on cash (if that's possible), Mr Valecha says it can be good news for mortgage borrowers.
Think twice before locking into a fixed-rate mortgage, though, as then you will not benefit from any further interest rate cuts. "At times like these, floating mortgage interest rates tend to be more attractive, and worth considering if buying or remortgaging," Mr Valecha says.
Mr Kyprianou also advises working harder on your career, either to make yourself essential to the company, so you are last in line for redundancies, or to help you find a new post faster. "Think about your strengths and unique selling points, and promote them to your boss, on LinkedIn and at conferences," he says.
Similarly, develop your skills through training courses, books and even life coaches. "Look for opportunities in your chosen field, and also threats, because some jobs are more exposed to a global downturn than others," Mr Kyprianou says.
This becomes an even bigger priority if your company is in financial trouble or you are exposed to technological change, he adds, such as the rise of artificial intelligence.
All this talk of recession may seem depressing, but remember, most will get through it unscathed. And, if you can hold onto your job and maintain your income you might even end up better off, Mr Battle adds. "It may sound heartless, but there are more deals available as businesses and landlords fight for fewer remaining customers."