If you look at the headlines, you'll know that big things are happening. Recession, fear and uncertainty are the words of the moment. My advice to you: get the small things you can control right and don’t panic. Ever the irrational creature, we humans are prone to various misguided beliefs, such as "it won’t happen to me"; "I know what I’m doing" — aka timing the markets or similar — and "this time it’ll be different". Talk of global recession is on the rise. This is not a curve ball. Back in December 2018, American economist Nouriel Roubini — branded Dr Doom for being the predictor of the 2007 housing bubble crash — stated that conditions will be ripe for a global recession in 2020. But messages from the powers that be are conflicting. Markets are braced for a downturn, but earlier this month, Federal Reserve chairman Jerome Powell said the Fed is not predicting a US Recession and that growth will be "moderate". Will it or won’t it happen? No one knows. But we do know that certain segments of economies are hurting, such as manufacturing, and engines of economic growth are struggling or sluggish, including the US, Germany and China. Here are some reasons why this is dominating the news: • A decade-long market bull run. This is the second-longest in history. Nothing continuously goes up, so is it time to come down? • The bond market yield curve inversion. This means the cost of short-term interest rates are higher than long-term rates. In other words, short-term bonds pay more than long-term bonds. Historically, this is a warning sign for markets and the economy. • The US-China trade war. Suffice to say, what happens in China and the US doesn’t stay in China and the US — we are all affected. • Donald Trump’s tweets. The reaction to the tariff threat at the start of August was spectacular with Wall Street, the Asian markets and oil all falling. This was in response to Mr Trump escalating the trade war with China by imposing tariffs on another $300 billion (Dh1.1 trillion) of Chinese goods. As the world sinks into a period of turbulence, what can the likes of us do to mitigate getting sucked under by the current? Here are a few simple tips you can subscribe to: • Think frugal instead of fearful: hoard your dirhams and assess whether you have enough savings to live off for a minimum of six months. • Pay down any debt you have where possible. • Stop spending on anything unnecessary. • Don’t chase the financial headlines, meaning don’t react to them. Read them if you must, then breathe and wait. No one can predict the future. What I can say on the record, and with absolute certainty, is this: yes, there will be a recession — eventually. When? No one knows. And that financial performance, yield, figures, charts and so on are never a straight line. While things unravel, think through Mr Roubini’s approach, shared during an interview in June 2009, when he was asked about his personal lifestyle expenses and other investments. He said, "I regularly save about 30 per cent of my income. Apart from my mortgage, I don't have any other debts. The credit crunch hasn't affected me much ... I've always lived within my means and, luckily, have never been out of work. I would say I'm a frugal person — I don't have very expensive tastes ... You don't need to spend a lot to enjoy things.” His words, not mine. I love his line about being lucky never to have been out of work. I’m sure his phone will continue to ring. Will yours? Don’t think "it won’t happen to me". Instead, think: bring in the money and keep it – while you can. <em>Nima Abu Wardeh is a broadcast journalist, columnist and blogger. Share her journey on finding-nima.com</em>
