As consumers brace for a possible recession, now is the time to be strategic with your money. Kathryn Tuggle, co-author of ‘How to Money’ and chief content officer at HerMoney, joined Cheddar News with tips on how to protect yourself from market volatility.

As consumers brace for a possible recession, now is the time to be strategic with your money, said Kathryn Tuggle, co-author of ‘How to Money’ and chief content officer at HerMoney. She joined Cheddar News to explain how to protect and diversify your assets before it's too late. "If you are going to have your money in cash right now, look to a high-yield savings accounts. And if you do have your money in the market, it's a really good time to check your asset allocation,” she said.

How to Protect Your Money Amid Market Volatility and Downturns

but it was the sea of red yesterday for us markets if you were watching, you know that well, the dow shedding almost 1300 points. Its worst day since june of 2020 the NASDAQ was down worse than 5% and it follows the streets humbly realization that inflation not slowing as much as hoped and in fact likely here to stay traders bracing for the Federal Reserve to raise interest rates by as much as 100 basis points next week. That's a full percentage point. So joining me now with tips on how to protect your money in the midst of this market, volatility is Katherine tuggle, co author of the book How to money and chief content officer at her money Catherine, It's great to see you this afternoon. Nice to see you. Certainly a big sell off that we saw yesterday in the stock market spooking. I think a lot of investors of course sell off that we saw, but also that inflation higher prices likely are here to stay what should consumers do in this environment with their money. Yeah, I mean it's a tough one right now. It feels like we're getting squeezed from all sides because we may see ourselves losing money in the stock market and we're also paying, you know, I saw a bottle of ketchup the other day for $12 that's in Manhattan granted, but still inflation is crazy right now and I know families all over are feeling the pinch. Um you know, typically it's a good idea to not put any money that you're gonna need in the next five years in the mar but right now with inflation, what we're hearing from a lot of people is they're saying I'm just gonna be losing money right now if I don't have my money in the market. And I think right now is a great time to look at high yield savings accounts, high yield savings accounts. Previously, for the last couple of years we're just paying nothing. They weren't worth putting your money in at all. But today I just checked the rates before chatting with you and we're seeing some rates at two 2.5%, which is really, really good. And if you want to see the best rate that you will qualify for, you can go to bankrate.com. They have a list like a running list that they update daily of the best possible rates. So I would say if you are gonna have your money in cash right now, look to a high yield savings account and if you do have your money in the market, it's a really good time to check your asset allocation, particularly if you made changes during the pandemic. Okay, so Catherine, it sounds like you would perhaps not advise investing in this dip. Is that because you expect that we might turn lower or that there's just so much uncertainty out there that buying the dip for a long term investor might not be the best solution right now. I mean, I definitely would say if you are investing right now in your 401k. If you have an investing plan where you allocate a certain amount each month that you put in the market continue to do that right now because basically right now with the market down, you are getting stocks at a bargain. So absolutely continue to invest. But if you know that you're gonna need to buy a house or buy a car or make any sort of big investment within the next five years, I would not have that money in the market. But for your long term investments for retirement for later on down the road, absolutely continue to invest. Don't pull your money out of the market. Just be smart about what you're gonna need for for that near term horizon emotionally. Of course, I think a lot of people get really worried when they see the stock market falling because they expect perhaps it means higher prices. The economy might be tanking is their job on the line. Right? All of these natural emotions as humans that run through us as the money expert. What would you advise to people who might be feeling anxious right now about their money as they see the stock market plunge. Yeah, I mean, I think, you know, if we can maintain our earning power during a recession, then then we'll fare okay. So I would take a long look at your job right now and see what industry you're in. You know, we've heard a lot of people in the tech industry being laid off, we heard snap the parent company of Snapchat peloton zoom. We've seen a lot of layoffs in certain sectors that may not be performing as well right now. So if I take a look at where you are in your job, if you feel like you have job security, then I would, you know, write it out and try to save as much as you possibly can. Just watching those prices while you're at the grocery store and not buying anything that you don't really need right now and saving as much as possible. And if you do feel like you're on shaky ground and you don't really like the look of where your industry might be headed. It's still a really, really good time to get hired unemployment only jumped up slightly for august to 3.7%. So it's a really good time to, to make a move if that is something that you feel like would give you that added security $12 for a bottle of ketchup. That is, that is really mind blowing. That was like the fancy gourmet market but still, I just had to laugh. It's crazy. That is really crazy. I wanted to ask you about another potential investment option. Catherine II bonds. It was actually his inflation really started to kind of jump into spring that these i bonds issued by the Federal reserve were coming more into focus of course offer a return based on the inflation rate and with inflation here to stay. Do you think that that might be a good option for some people? Look there are great inflation hedge. The only caveat I would give is that it's limited to $10,000 a year. Right? So that's not going to be a long term kind of exclusive inflation hedge for you. But definitely I would say Max out, get your $10,000 worth. And then from there I would look to high yield savings accounts, high yield savings account that is certainly good to know any other sectors or ways to diversify your stock portfolio. Catherine if you are looking at your 401K. Or even perhaps perhaps a brokerage account thinking what should I be doing in this environment? Yeah, I mean I would say look to 2008 to the sectors that performed really well during that recession because we're seeing some consistencies there anything in energy, oil and gas, food, consumer products, essential products, even entertainment. All of those sectors are looking decent right now. Um I would be hesitant with tech. I would be hesitant with crypto. I would be hesitant with everything that we have seen volatility around in the last six months and and just look to sort of some of those tried and true options Catherine, we got to leave it there. Um you're so good. You've got so much knowledge. Thank you for breaking it down. Thank you. Thank you. Including the ketchup bit Catherine Jungle, co author of the book How to Money and the chief content officer at her Money. Thank you so much.