70% of Female Investors Fear a Near-Term Recession. Should You Be Worried?

Is the economy about to take a turn for the worse?

When the COVID-19 pandemic first hit U.S. soil, it spurred an unprecedented unemployment crisis that forced millions of Americans out of the workforce within weeks. The economic situation got so bad that lawmakers had no choice but to dish out aid quickly in the form of stimulus checks and other provisions, like eviction moratoriums.

Fast forward two years, and thankfully, the economy is in a much better place than it was in March 2020. Not only is the labor market loaded with jobs, but demand for consumer goods is strong, as evidenced by recent inflation.

In spite of that, it seems many people are worried things could take a turn for the worse. In a recent Nationwide survey, 70% of female investors said they're concerned about an economic recession happening over the next year. But are those fears grounded -- or unfounded?

A world of instability

These days, there are many reasons for investors in particular to be on edge. The stock market has been volatile since January, and tensions overseas are making a lot of people nervous about a broad economic impact.

But interestingly, the survey took place in late 2021, which means these factors clearly didn't play a role in respondents' outlook. Therefore, fears of a near-term recession could largely be a byproduct of the generally turbulent times we've all been living in.

Does that mean 70% of female investors are wrong to fear a recession? Not necessarily. Without a crystal ball, we can't predict when economic conditions might take a sudden turn for the worse. But based on recent developments, there's also no reason to fear a recession is right around the corner.

That said, it certainly wouldn't hurt to take steps to gear up for one. And doing so might give you some much-needed peace of mind.

Preparing for a recession

It's always a good idea to be prepared for a recession, even if you don't suspect one is imminent. One of the best ways to do so is to build a solid emergency fund -- one with enough money to cover three to six months of essential living expenses. That way, if you were to lose your job or suffer income loss, you'd have some cash reserves to tap.

It's also a good idea to minimize high-interest debt, or get rid of it entirely. If you owe money on your credit cards, map out a plan to shed that balance, whether by cutting back on spending to free up extra cash or boosting your income with a second job.

And speaking of second jobs, side hustles may be trendy these days, but having one could buy you some protection in the event of a recession. If you have a second income stream at your disposal and you're let go at your main job, you'll have work -- and earnings -- to fall back on as you search for full-time work.

Although there's no reason to lie awake at night worrying about a recession, it definitely pays to take steps to protect yourself in case there is one. So regardless of your worry level, you may want to make financial changes that put you in a better position to withstand a period of widespread economic distress.