Joe Anderson
ABOUT Joseph

As CEO and President, Joe Anderson has created a unique, ambitious business model utilizing advanced service, training, sales, and marketing strategies to grow Pure Financial Advisors into the trustworthy, client-focused company it is today. Pure Financial, a Registered Investment Advisor (RIA), was ranked 15 out of 100 top ETF Power Users by RIA channel (2023), was [...]

Alan Clopine

Alan Clopine is the Executive Chairman of Pure Financial Advisors, LLC (Pure). He has been an executive leader of the Company for over a decade, including CFO, CEO, and Chairman. Alan joined the firm in 2008, about one year after it was established. In his tenure at Pure, the firm has grown from approximately $50 [...]

When you hear the word recession, what comes to mind: run for the hills, or golden opportunity? From bear markets to rising inflation, the conditions that create a recession can impact your investments and your ability to retire. If you make the wrong financial moves during a recession it can take decades for your portfolio to recover. We want you to be prepared to grow your wealth, regardless of the economy and market conditions. Joe Anderson, CFP®, and Big Al Clopine, CPA, will arm you with the tools and strategies to help recession-proof your portfolio.

Free Download: Recession Protection Guide

Recession-Proof Portfolio:

  • Recession Signs
  • Position Your Portfolio
  • Boost Your Portfolio

Important Points:

    • 0:00 – Intro
    • 2:52 – Recession Protection
    • 3:50 – Signs of a Recession
    • 6:10 – Recession Duration: How long do recessions last?
    • 7:00 – Download the Recession Protection Guide
    • 7:57 – True/False: Historically the markets do not rebound after a recession.
    • 8:48 – Financial Market Performance
    • 10:50 – Recession-Proof Sectors
    • 11:50 – Stocks and Bonds
    • 13:30 – Cash Savings Needed
    • 15:20 – Download the Recession Protection Guide
    • 16:11 – True/False: I should wait until the market bottoms out before I invest more money during a recession.
    • 16:51 – Dollar Cost Averaging
    • 19:34 – Stay Invested
    • 20:21 – Timing the Market
    • 22:12 – Roth Conversions
    • 22:58 – Pure Takeaway
    • 23:29 – Download the Recession Protection Guide

Subscribe to Your Money, Your Wealth® on YouTube!


Joe: When you hear the word “recession, what do you think? Run for the hills, or maybe an opportunity? Hopefully we don’t have a recession, but if we do, don’t worry about it. We got you covered. The show is called “Your Money Your Wealth.” Joe Anderson here, CERTIFIED FINANCIALPLANNER™ and President of Pure Financial Advisors, and, of course, I’m with the big man. He’s right over there. Big Al, how are you doing, sir?

Al: Doing great.

Joe: Recession-proof.

Al: Yeah, let’s talk about it.

Joe: Yeah, that’s a buzzword, right? You hear “recession,” you know, we get inflation, we get a little bit of a bear market and, you know, the pundits start talking about recession. Are we in one? Is it coming? What do we do? Do you know what to do? Don’t worry about it. Most people don’t. 41% of people that were surveyed said, “You know what? I have no idea what to do with a recession,” and half the people of those don’t even know what a recession is. So let’s step back, let’s figure it out, and let’s get you a plan. That’s today’s Financial Focus, folks.

So, when we’re looking at items to do, probably have to cut spending. 40% of people said they’re going to do that. 20% of people said they would pay down some debt, increase savings, maybe diversify your income. This is interesting because this is probably the only thing that you can do when a recession hits.

Al: Well, that’s what’s kind of surprising about this survey. Cutting down spending, yeah, for sure, because typically there’s less income. Not for everybody, but for a lot of people, there’s less income, so you definitely want to cut your spending. That makes sense. In terms of paying down debt, you don’t have the money. You don’t have the extra money to pay it. That’s something you should be thinking about before the recession, to get ready for a recession, right? Saving, increasing your savings, Joe. That’s harder to do in a recession. Definitely continue saving if you can because the best time to be contributing to your 401(k) is when the market’s down. A lot of people stop investing, but, yeah, you should be doing that before. And then, finally, diversify income. That’s something you should always have done.

Joe: Yeah, or–how I interpret that is maybe, you know, looking at other income sources, potentially.

Al: You could do that, and either diversify your investments or diversify your income, or have another income source potential that you can tap into if a recession hits.

Joe: Right. You know, when you hear these buzzwords every recession and, oh, you know, bear markets and things like that, well, at least people are thinking about the right things here, but the implementation is key, right? You can have the best-laid-out plans, but if you can’t implement the strategy that you’re thinking about, right, it’s all for nothing. So when you’re thinking about implementation, now is the time. If you think, “Hey, there’s gonna be a recession or a bear market coming,” or your investments are going to go down or it might get doom-and-gloom for a little bit, right, here’s the steps that you should implement now versus waiting for, you know, the, you know, the bad thing to happen.

Al: Yeah, well, I think that’s the key. It’s, like, a lot of these things, you need to be prepared for before the recession, so that when it does hit–and recessions will hit, we know that–you’re prepared. Let’s first go over what– you know, signs of recession. So there’s, if you look at economists out there, about 48 economists were recently surveyed. About 60% think there’s going to be a recession in the next 12 months, 40% don’t, so the truth is none of us really know for sure, but there are certain signs, so we’ll get into that. Then we want to talk about positioning your portfolio to ride out a recession or what–how that should be, and then, finally, how to boost your portfolio; in other words, ways to actually profit from the recession, so, Joe, I think these are some things that people need to know because a lot of economists are thinking this may be around the corner.

Joe: Sure. I mean, we’re not economists, by any stretch.

Al: We are definitely not. We’re gonna do our best to make this simple.

Joe: We are so far away from being an economist. Oh, this is – here’s my –

Al: Oh, that’s your two cents?

Joe: Yeah, here’s my two cents here. What are the signs, right? What the heck is it? Well, uh, some people say two quarters of negative GDP. Inflation can be an indicator of a recession, and we’ve definitely seen some pretty high inflation over the last what, 6 to 12 months? And then high unemployment. So we’re looking at–[sighs]– you know, we’re seeing some lower GDP and higher inflation, so we got 2 out of the 3, but unemployment is still pretty good.

Al: It’s still pretty good. I mean, it’s trending up a little bit, but, you know, even less–Q4 GDP was positive, so we’ll have to see how this plays out. But, Joe, we’ve got this amazing chart, maybe   that you can help us through.

Joe: I would love to, Big Al. OK, let’s take a look. So, from 1960 to 2020, the white lines here that you see is a recession and the duration of that overall recession. We’ve had 9 recessions. The latest was the COVID recession.

Al: That was a short one.

Joe: The short one. Well, it lasted just a couple of months. But when you look at the indicators that we talked about, so here’s GDP, gross domestic product, and then you got inflation and then you got unemployment. And when you look at these kind of together, then that’s where you see these spikes, right? When they’re all kind of merging together is when you see these recessions. So, I mean, this could be data-mining as well, but this is how people are looking at it now, is that, hey, we’re seeing a little bit of increase of inflation, OK? Gross domestic product is still pretty good, right?

Al: It is now, yeah, and I think that–I mean, unemployment rate is a pretty good indicator from this chart, but it’s not always, so–but it’s why a lot of economists think we’re gonna come into recession because the unemployment rate, it’s actually going up. It’s not bad, but inflation’s up, interest rates are up, so that’s another one that can indicate a recession.

Joe: Looking at the term or length, right, so from 1854 to 2020–so a pretty long time– the average recession is about 17 months, a year and a half, right? But if we take a look, a little bit more recent–from 1945 to 2020, all right–it’s less than a year, so we can get through it, weather the storm, all right? But then the last one was only two months, pretty short one; I think the shortest one we’ve ever had in history. So, you know, if you’re looking at probably a year of a little bit slow growth, all right, maybe a little bit market volatility, higher inflation, a little bit higher unemployment, you know, so can we weather the storm here? So what are some things that we should be looking at? Stick around ’cause we will kind of give you a bulletproof plan to figure this stuff out. But if you want to go to our website, yourmoneyyourwealth, we have a guide. It is called a “Recession Protection Guide.” How about that for a play on words? If you want to protect yourself from a recession, get our “Recession Protection Guide.” Go to yourmoneyyourwealth.com, click on that special offer this week, and get your guide for free. That’s it for this segment. We’ll be right back. Show’s called “Your Money Your Wealth.”

Joe: Hey, welcome back to the show. Show’s called “Your Money Your Wealth.” Joe Anderson, Big Al. We’re protecting you from a recession. Go to our website, yourmoneyyourwealth.com, click on that special offer. This week, it’s our “Recession Protection Guide,” all right? Find out the tips and tricks that you need to do in case there’s a recession and make sure that you can do the things that you still want to do in retirement, or hopefully a recession doesn’t jeopardize your retirement. Before we get in those goodies, let’s see how you did on the true/false question.

Al: “Historically markets do not rebound after a recession.” True or false? Well, that’s false. In fact, if you take nothing else away from this show, typically after a recession is when we have our best markets. Why? Because the market’s lower, that we get through the recession and the potential is much higher. And, Joe, it’s just–and a lot of people—

Joe: We’ve had 10 recessions.

Al: Yeah.

Joe: And the market has recovered.

Al: Every time.

Joe: Ha ha ha!

Al: Every time, but not only that, it recovers dramatically.

Joe: It does.

Al: In the short term.

Joe: Yeah.

Al: I think that’s the point.

Joe: I think we have a slide here.

Al: OK, good.

Joe: So look at Black Monday, all right? It was down 33%; 12 months later, all right, it was up 22%, 21.5%. Well, if you got out and didn’t get back in, right, you lose those big, you know, spikes in the overall market.

Al: And that’s–you see that over and over.

Joe: The tech bubble, down 50%. Who wants to stay in the market, right? You just see your money drop, drop, drop, drop. You know, you’re down 50. It’s like staying in and holding on to that ride is so difficult to do, but a lot of people end up bailing, but then they miss the spike up, right? So the financial crisis–that was doomsday, that was, like, the worst time ever. We never thought that the market would recover, and it recovered huge, all right? 2008 wasn’t that long ago, right? And look at where the markets are at today, and then, of course, COVID, we had that huge spike there, too, so this is really difficult to do, to stay the course, right? And everyone hates hearing that, especially in bear markets or when you see your portfolio down 10%, 20%, 30%, 40%. It’s like, “Stay the course? If I would have got off this course, I wouldn’t have lost 50%!” But you never know when it’s gonna spike back up, so that’s why having a strategy, having the discipline, and having the confidence in your strategy’s key.

Al: Well, I think that is the key because a lot of people, they’ve told us during the Great Recession, “I got out,” they were so proud of themselves, and I got to tell you, the majority of those people never got back in ’cause they expected another downfall, and they missed the longest bull run in the history of the United States, which was 10 years. So this is–it’s one thing to try to figure out when to get out; it’s a whole ‘nother thing to figure out when to get back in, and historically, people that do that, more often than not, end up in a worse spot.

Joe: Yeah, when we’re looking at overall companies or sectors, we’re not trying to suggest by any stretch that you time markets or that you pick sectors or you pick individual stocks. We believe that having a globally diversified portfolio, with hundreds or even thousands of different, individual names or securities, is probably a better way to go, right? Control your diversification, control your cost, control your risk, you know, but if you’re looking at things, you know, from a recession perspective, right, utility companies–you still have to have your lights on, right? Especially if it happens in the summer, you need that little A/C–well, hopefully, right? You just open the windows. Or consumer staples, right, healthcare, you know, and then a little retail.

Al: So there’s obviously sectors that we still need, regardless of the economy, yeah, so that’s what the point is, and these sectors have tended to outperform the S&P. But the difficult thing is which to buy, when to buy, when to sell, when to get back into the overall market. We’re saying it’s very difficult, but if you just look in the short term, yeah, these 4 sectors tend to outperform the S&P.

Joe: Looking at stocks, bonds, and then a balanced fund since the Great Depression of 2021, right? Over the long term, you’re going to receive compensation for taking the risk of stocks, all right? So if you’re in the S&P 500, own all 500 stocks, over that time period, you did about 9.5%, OK? Not bad. Pretty good, right? And then bonds, right? 5.5%. And then, if you have a balanced portfolio of some stocks and bonds, over the long term, right, 8.5%. So, instead of trying to pick the stocks or trying to pick the sectors of what to go in and try to time recessions and when you’re gonna get in or out, most of the time, we’re already in a recession or almost coming out before we even knew that we were in the recession to begin with.

Al: Yeah, well that’s exactly right, and I think this is a good reminder of staying the course. Now, this 9.5%, 9.6%, this is year in, year out. This is including all the bad years and all the good years, averaged together on an annual rate of return, so it’s a pretty good rate of return. Now, the thing is–I mean, I know some people, they like to time the markets, they like to time sectors, they like to get in and out, they like to pick stocks, and if that’s you, by all means. I guess what we’re saying, Joe, is you don’t have to; the market works over the long term.

Joe: Yeah, I mean, what is the added rate of return that you’re going to receive by doing that type of activity, is the question that you have to ask, right? So if you feel that you’re smarter than the overall, collective minds of the entire market, and that you think that you can outperform, you know, these numbers, well, then, yeah, that’s alpha, what we call that, right? So you’re going to outperform and try to get a higher expected rate of return, but what is the likelihood of that outcome, you know? What is the risk that you’re going to take to try to achieve that outcome? First is just having a diversified portfolio that you can rebalance, manage the risk, tax-manage the overall accounts.

Al: Joe, let’s also talk about how much cash, how much emergency cash you should have on hand, depending upon your situation. So, if we look at couples, maybe it’s 3 to 6 months of emergency cash, just in case, you know, maybe one of you gets laid off. If you’re single, you might want a little bit more ’cause now you only have one wage-earner, so it might be more of an impact. If you get laid off, it’s just your income. And of course, if you’re retired, well, you’re not necessarily depending upon your salary, but you are depending upon the market to be able to produce a certain amount of growth and income to live off of. Maybe you want a little bit longer period, a year to 3. Some people may want to have 5 years of safety or even 10 years.

Joe: Yeah. I mean, this is, like, a total strategy. If you’re currently retired, you know, then you have to take a look at your fixed income. Do you have a pension, do you have Social Security, what are your spending needs, and what does the portfolio look like is really gonna determine this. But I like these numbers here. So if you’re single, right, and if you get laid off, you probably at least want 6 to 9 months because an average recession that we talked about is probably right around that year time frame. And so let’s say companies start laying people off, it might take them, you know, close to 6 to 9 months or even longer for them to start that hiring cycle again, so making sure that you have enough cash to pay your mortgage or your rent, feed yourself, and things of that nature, but, Al, you’re right. You know, maybe one spouse gets laid off, the other one is still working, so 3 to 6 months is a pretty good number. But when you’re retired, right, this is a whole different strategy. It’s not necessarily a cash reserve. It’s looking at what does the portfolio look like, how much do you want in safety like CDs, cash, bonds, treasuries, things like that, versus more risky asset classes such as stocks, real estate, precious metals, and the like? So, hey, if you want our guide to protect your overall retirement, it’s our “Recession Protection Guide.” Go to yourmoneyyourwealth.com and click on that special offer. Yourmoneyyourwealth.com, click on that special offer. It’s our “Recession Protection Guide.” It’s yours, absolutely free. Even if we fall into a recession, it is still free, only for you. Yourmoneyyourwealth.com, click on that special offer. We’ll be right back.

Joe: Hey, welcome back to the program. The show is called “Your Money Your Wealth,” Joe Anderson and Big Al. Breaking down the recession and how to protect yourself. Go to yourmoneyyourwealth.com, click on that “Recession Protection Guide,” yourmoneyyourwealth.com. The “Recession Protection Guide”–it’s yours for free when you click on that special offer. All right, let’s see how you did on that true/false question.

Al: “I should wait until the market bottoms out before I invest more money during a recession.” True or false? I would say a lot of people do that. It’s definitely false. Why? Because, when the market’s going down, you’re buying stocks while they’re cheaper, so you definitely want to keep investing while the market goes down, and furthermore, who knows when the bottom has actually happened until it already happens and you can look backwards?

Joe: Yeah. [Sighs] Again, I think that’s where emotions get in the way, and it’s really difficult to be a good investor with all of these emotions, especially when you see your dollar values go down. You know, we hear this, it’s like, “I don’t want to throw good money after bad,” you know, “I’m gonna wait until this subsides and then I’m gonna get back on my strategy.” But if you look at it like this–OK, so when things are rosy, right, when the market is going up, we feel good, all the headlines are really great, “Wow, things are moving in the right direction, look at how high the market is going.” Let’s say you’re saving $250 a month in an up market, OK? So the green is up, of course, so over 12 months, I’m saving, I’m saving, I’m saving, right? And as that market continues to go up, guess what. The price of that particular investment is also going up, which is good, right, and also bad, depending on your time frame, OK? Because people don’t like to invest here, Al, when things are bad, but look at the difference. If I save $250 a month, OK, in an up market, I end up buying 46 shares. In a down market, the same security, I end up buying almost double the shares, over double the shares–109 shares. So if they think about it in shares, right, versus the actual price, I think people would be better investors.

Al: Well, they would, and of course, it feels better when you’re investing in an up market ’cause you’re not only adding to your portfolio, but then it’s, like, it keeps going up, you feel really good about it. I get it, but the truth is it’s even better if you had to compare, right? It’s better to be investing in a bad market because you’re buying stocks while they’re cheaper. The share price is cheaper, you’re buying low. What do we try to do? We try to buy low and sell high, right? We don’t really try to buy high and sell low, and that’s what a lot of people do ’cause they love to invest in an up market, but when the market goes down, they get afraid, they end up selling, and they just do that same thing–buying high and selling low.

Joe: Right. I mean, we go shopping when things are on sale, right? When things are at full price, we’re like–well, what do we do? We’re gonna wait till that thing goes on sale, but we do the exact opposite with our overall investments, all right, because it’s like, “Oh, I feel good about investing here, but I don’t feel good about investing there.” Here’s another really prime example here–$400,000. Great Recession hits, 2008, OK, almost half, right–$200,000? What did you do? Did you go to cash? Did you stay the course? Did you maybe stop saving, right? There’s 3 different alternatives here. If you stayed the course–400 and then back in 2011, you know, you’re way above what you started. But if I went to cash, right, and didn’t do anything, I didn’t even get my money back, you know, over time, right? You’re just losing money safely here.

Al: We’ve all been through it. We get elated when the market’s going up, we get very fearful when it’s going down. If you could figure out how to try to have a disciplined strategy, where you’re constantly investing a fixed amount every month, like a 401(k), and keep invested, you end up in a much better spot.

Joe: You know, this is an interesting chart here, too. Let’s say you want to save $2,000 annually for the next 20 years, right, and you can pick, you have that crystal ball, and you could time it perfectly to invest that $2,000 in that year where the market is the lowest. Over that 20-year time period, you’re going to have $151,000 accumulated. This is in the S&P 500. Let’s say you just invest that $2,000 immediately, soon as you get it, January 1. So it’s not as good because you don’t have the crystal ball, but it’s not too bad–$151,000 versus $135,000. You would expect it to be higher if you had that magic crystal ball. So you dollar cost average, put a couple of hundred dollars in a month, right, for the 12 months. Almost identical to investing it immediately, so the markets go up and down, but if I just invest as soon as I get it versus, you know, breaking it up over 12 months, you’re gonna be a little bit lower here, but not–by a few dollars, right? Bad timing, you pick the worst time to invest–$121,000. You didn’t invest at all– $44,000. So it doesn’t really matter what your strategy is; investing is gonna produce a lot higher result than doing nothing at all.

Al: Yeah and I think–let’s talk about perfect timing. No one has perfect timing. Heh! No expert has perfect timing. It’s just not possible, and like we said before, those that try usually don’t even end up with market returns. Now, there are exceptions, for sure, but most people that try to time perfectly end up earning less than what the market would have given them had they just stayed invested.

Joe: Another quick strategy to think about when you’re looking at down markets is doing a Roth conversion. And so this is taking money that you have in your current retirement accounts that grows tax-deferred, and when you pull it out, you have to pay ordinary income tax on it. Instead, you could take those dollars and convert those into a Roth IRA, you pay the tax on whatever you convert, but then you have compound tax-free growth on whatever those dollars are. So let’s say you have some shares, right, that are $100 a share and you have 100 shares. Well, if the market’s down, you still have the 100 shares, but they’re worth $80. It might make sense, “Hey, maybe I convert some of those shares because they’re 20% down, I move them into the Roth IRA, and then, when the market recovers, all of that recovery and that growth grows tax-free.”

Al: Yeah, so clearly, you’ve got a lower tax cost, or you could think of this another way. Maybe you still contribute–or convert $10,000, but now you’re getting more shares in because they’re at a lower price, meaning that you get more in the Roth, you get more tax-free growth in the future. [Whoosh, slam]

Joe: All right, what did we learn? Recession signs. No one can predict the future, to be honest with you, you know, but there are some signs that you can look at: you know, high inflation, high unemployment, GDP, things like that that we talked about. Position your portfolio. You need to have a strategy first, right, and so, good times and bad times, you know what to do and how to pivot, you know. And then boost your portfolio. There’s different things that you can do from a tax perspective, especially, or how you’re saving into the overall markets can really help boost those overall returns. If you want our guide to protect your overall retirement, it’s our “Recession Protection Guide.” Go to yourmoneyyourwealth.com and click on our special offer. Yourmoneyyourwealth.com, click on that special offer. It’s our “Recession Protection Guide.” It’s yours, absolutely free. All right, that’s it for us. For Big Al Clopine, I’m Joe Anderson, and we will see you all next time.



• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.

• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.

CFP® – The CERTIFIED FINANCIAL PLANNER™ certification is by the Certified Financial Planner Board of Standards, Inc. To attain the right to use the CFP® designation, an individual must satisfactorily fulfill education, experience, and ethics requirements as well as pass a comprehensive exam. Thirty hours of continuing education is required every two years to maintain the designation.

AIF® – Accredited Investment Fiduciary designation is administered by the Center for Fiduciary Studies fi360. To receive the AIF Designation, an individual must meet prerequisite criteria, complete a training program, and pass a comprehensive examination. Six hours of continuing education is required annually to maintain the designation.

CPA – Certified Public Accountant is a license set by the American Institute of Certified Public Accountants and administered by the National Association of State Boards of Accountancy. Eligibility to sit for the Uniform CPA Exam is determined by individual State Boards of Accountancy. Typically, the requirement is a U.S. bachelor’s degree which includes a minimum number of qualifying credit hours in accounting and business administration with an additional one-year study. All CPA candidates must pass the Uniform CPA Examination to qualify for a CPA certificate and license (i.e., permit to practice) to practice public accounting. CPAs are required to take continuing education courses to renew their license, and most states require CPAs to complete an ethics course during every renewal period.