The world has undergone four major recessions since the 1950s, the most recent of which was the longest economic downturn since the Second World War.
In the year following what is now infamously referred to as the Great Recession, economic activity declined in half of all countries around the globe and the after-effects included rising unemployment rates and a reduction in wages — even in some of the most advanced economies.
While official global growth in 2022 is recorded at 3.6 per cent and contradicts any sign of a decline that previous major recessions indicated, there is a 98.1 per cent chance of a world recession looming on the horizon, according to Ned Davis Research.
The recession model has only ever cited such a high probability during the 2008 financial crisis and in 2020, amid Covid-19.
Many countries are only just recovering from the aftermath of the pandemic, while some are still struggling to find their feet.
Fears of a looming recession are the last thing anyone wants to hear about but if one is lurking around the corner, taking strategic steps towards being prepared is the best course of action.
Be prepared, but not scared
In the early 2000s, Amazon sold $672 million in convertible bonds to secure its financial position. About a month later, the dotcom bubble burst. More than 50 per cent of all digital start-ups were forced to shut down over the next few years.
Amazon’s decision to deleverage when it did, ultimately enabled the company to become the global powerhouse that it is today.
Whether you are an individual, couple, family or corporation, being prepared today will translate to your success tomorrow.
By reducing any pending debts, without incurring additional ones, a recession will be less intimidating to deal with.
Selling off liabilities such as cars, delaying major purchases and cutting down on holiday spending will increase your cash flow so that you can deal with a looming crisis.
Alternatively, you can also take smaller but still effective steps by spending less on “luxuries” such as premium coffees and online subscriptions to keep cash in your pockets — if you practice delayed gratification, you will be better off.
Be conscious of contingency
Shrinking your debt overnight is easier said than done.
If you are unable to off-board a mortgage plan or instantly rid yourself of student debt, then the next best thing is to ensure you have an emergency fund.
This is the cornerstone of good financial planning and in addition to offsetting the effects of a recession, it is also helpful in dealing with other unforeseen circumstances such as a serious illness or a change in personal circumstance.
The size of your emergency fund will depend on your lifestyle and associated variables, including income, costs and dependents, to name a few.
With so many moving parts, a general rule of thumb is to stash a minimum of six months’ worth of expenses, but remember that this isn’t a nest egg for a long-term savings plan or a holiday. It is a safety net that should only be tapped into in the event of an emergency.
Furthermore, work on building a profitable fund that is liquid with unfixed terms.
Over time, this allows you to easily have access to cash flow and to reinvest it when opportune moments arise so that you can, over time, save up your yearly expenses by 20 times more to become financially free.
Be a savvy investor
If you have successfully mitigated your risk by lessening or eliminating debt and pulled together some emergency savings, it is time to think about the future.
The market is expected to remain volatile as professional investors assess recession odds.
It could take some time for stock prices to bounce back from the market’s sell-off of more than 17 per cent in the year to date.
This makes it an opportune time to invest money that you can do without for the next few years, as it can allow you to build wealth for longer-term goals such as retirement.
Stocks, bonds and real estate investment trusts are some of the many available avenues you can pursue to secure your financial future amid the projected 2023 recession.
The bottom line is that a recession will affect all of us in one way or another, but a little preparation upfront will help you to sleep easier and be advantageous in the long run.
Bas Kooijman is the chief executive and asset manager of DHF Capital, a securitisation company for financial services
Company%C2%A0profile
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Fixtures (all in UAE time)
Friday
Everton v Burnley 11pm
Saturday
Bournemouth v Tottenham Hotspur 3.30pm
West Ham United v Southampton 6pm
Wolves v Fulham 6pm
Cardiff City v Crystal Palace 8.30pm
Newcastle United v Liverpool 10.45pm
Sunday
Chelsea v Watford 5pm
Huddersfield v Manchester United 5pm
Arsenal v Brighton 7.30pm
Monday
Manchester City v Leicester City 11pm
Non-oil%20trade
%3Cp%3ENon-oil%20trade%20between%20the%20UAE%20and%20Japan%20grew%20by%2034%20per%20cent%20over%20the%20past%20two%20years%2C%20according%20to%20data%20from%20the%20Federal%20Competitiveness%20and%20Statistics%20Centre.%C2%A0%3C%2Fp%3E%0A%3Cp%3EIn%2010%20years%2C%20it%20has%20reached%20a%20total%20of%20Dh524.4%20billion.%C2%A0%3C%2Fp%3E%0A%3Cp%3ECars%20topped%20the%20list%20of%20the%20top%20five%20commodities%20re-exported%20to%20Japan%20in%202022%2C%20with%20a%20value%20of%20Dh1.3%20billion.%C2%A0%3C%2Fp%3E%0A%3Cp%3EJewellery%20and%20ornaments%20amounted%20to%20Dh150%20million%20while%20precious%20metal%20scraps%20amounted%20to%20Dh105%20million.%C2%A0%3C%2Fp%3E%0A%3Cp%3ERaw%20aluminium%20was%20ranked%20first%20among%20the%20top%20five%20commodities%20exported%20to%20Japan.%C2%A0%3C%2Fp%3E%0A%3Cp%3ETop%20of%20the%20list%20of%20commodities%20imported%20from%20Japan%20in%202022%20was%20cars%2C%20with%20a%20value%20of%20Dh20.08%20billion.%3C%2Fp%3E%0A
MATCH INFO
Uefa Champions League final:
Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports
FIXTURES
Monday, January 28
Iran v Japan, Hazza bin Zayed Stadium (6pm)
Tuesday, January 29
UAEv Qatar, Mohamed Bin Zayed Stadium (6pm)
Friday, February 1
Final, Zayed Sports City Stadium (6pm)
Global state-owned investor ranking by size
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China
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UAE
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Japan
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Norway
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Canada
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Australia
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South Korea
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Hydrogen: Market potential
Hydrogen has an estimated $11 trillion market potential, according to Bank of America Securities and is expected to generate $2.5tn in direct revenues and $11tn of indirect infrastructure by 2050 as its production increases six-fold.
"We believe we are reaching the point of harnessing the element that comprises 90 per cent of the universe, effectively and economically,” the bank said in a recent report.
Falling costs of renewable energy and electrolysers used in green hydrogen production is one of the main catalysts for the increasingly bullish sentiment over the element.
The cost of electrolysers used in green hydrogen production has halved over the last five years and will fall to 60 to 90 per cent by the end of the decade, acceding to Haim Israel, equity strategist at Merrill Lynch. A global focus on decarbonisation and sustainability is also a big driver in its development.
The%20Roundup
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UAE currency: the story behind the money in your pockets
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Sunday's fixtures
- Bournemouth v Southampton, 5.30pm
- Manchester City v West Ham United, 8pm
More from Rashmee Roshan Lall
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
'Joker'
Directed by: Todd Phillips
Starring: Joaquin Phoenix
Rating: Five out of five stars
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
'Hocus%20Pocus%202'
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CABINET%20OF%20CURIOSITIES%20EPISODE%201%3A%20LOT%2036
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Jawan
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What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
The specs
Engine: 2.0-litre 4-cylturbo
Transmission: seven-speed DSG automatic
Power: 242bhp
Torque: 370Nm
Price: Dh136,814
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%201.5-litre%204-cylinder%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20101hp%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20135Nm%3Cbr%3E%3Cstrong%3ETransmission%3C%2Fstrong%3E%3A%20Six-speed%20auto%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh79%2C900%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Company%20profile
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20WallyGPT%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2014%3Cbr%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3ESaeid%20and%20Sami%20Hejazi%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%3Cbr%3E%3Cstrong%3EInvestment%20raised%3A%20%3C%2Fstrong%3E%247.1%20million%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%2020%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3EPre-seed%20round%3C%2Fp%3E%0A
Mission%3A%20Impossible%20-%20Dead%20Reckoning%20Part%20One
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When Umm Kulthum performed in Abu Dhabi
Known as The Lady of Arabic Song, Umm Kulthum performed in Abu Dhabi on November 28, 1971, as part of celebrations for the fifth anniversary of the accession of Sheikh Zayed bin Sultan Al Nahyan as Ruler of Abu Dhabi. A concert hall was constructed for the event on land that is now Al Nahyan Stadium, behind Al Wahda Mall. The audience were treated to many of Kulthum's most well-known songs as part of the sold-out show, including Aghadan Alqak and Enta Omri.
PROFILE OF STARZPLAY
Date started: 2014
Founders: Maaz Sheikh, Danny Bates
Based: Dubai, UAE
Sector: Entertainment/Streaming Video On Demand
Number of employees: 125
Investors/Investment amount: $125 million. Major investors include Starz/Lionsgate, State Street, SEQ and Delta Partners
Guide to intelligent investing
Investing success often hinges on discipline and perspective. As markets fluctuate, remember these guiding principles:
- Stay invested: Time in the market, not timing the market, is critical to long-term gains.
- Rational thinking: Breathe and avoid emotional decision-making; let logic and planning guide your actions.
- Strategic patience: Understand why you’re investing and allow time for your strategies to unfold.
North Pole stats
Distance covered: 160km
Temperature: -40°C
Weight of equipment: 45kg
Altitude (metres above sea level): 0
Terrain: Ice rock
South Pole stats
Distance covered: 130km
Temperature: -50°C
Weight of equipment: 50kg
Altitude (metres above sea level): 3,300
Terrain: Flat ice