Is the stock market going to crash? Are we heading for a recession? Should I start saving more for my children or get life insurance? How long until the stock market recovers?  

If you’re asking yourself these questions, you’re not alone. The coronavirus pandemic brought an unprecedented amount of uncertainty and with it the stock fell by 25%. Many parents now find themselves working from home and homeschooling their kids. All while watching the stock market make wild moves, and digesting news that suggests we are in or rapidly heading towards a “recession.”

As parents, we know how you feel. Unfortunately,  we can’t help with the homeschooling, but we can help you secure a better future for your children.  To begin we will provide clarity on three topics: what recession means for you, how to react to the market volatility, and what investment strategies to consider during a period of uncertainty. We take solace in the words of notable investors throughout history who have helped shape our approach to helping our clients achieve their goals. 

“Invest for the long haul. Don’t get too greedy and don’t get too scared.”

Shelby M.C. Davis

What does the recession mean for you?

A recession occurs when there are at least two consecutive quarters of negative GDP (economic activity) after a period of positive growth. Recently, recessions in the US happen every eight to ten years. The housing crisis caused a recession that occurred about 12 years ago. Since then, the economy has had the longest bull run in history. This period of prolonged growth made the market overdue for a pullback. The current health crisis shocked the economy and served as a catalyst for a recession in 2020. 

The good news is that recessions generally don’t last very long. The analysis of 10 economic cycles since 1950 show that recessions have lasted between eight and 18 months, with an average of about 11 months. Of course, if you lose your job, or any other source of income due to the stay at home requirements, this may sound like an eternity.. However, it’s important to have a long-term perspective, and look at the big picture. 

Most economists agree that this current recession will have a V-shape type of recovery characterized by a quick bounce back to normal conditions after social isolation is over. Also, the government has developed an economic stimulus package that should support a strong recovery. Based on our estimates, this recession should only last 6-8 months. By fall, we should begin to recover.


“History provides a crucial insight regarding market crises: they are inevitable, painful and ultimately surmountable.”

Shelby M.C. Davis


How should you react to market volatility?

The stock market typically reflects investor sentiment and confidence about economic fundamentals. If you’re currently in the stock market or have a retirement or college savings portfolio, you recently witnessed unprecedented volatility with wild moves up and down. Many feel like their heads are  spinning while deciding whether or not to sell, change investment allocation, or stay the course and wait for the recovery. 

Our general advice is that if you already invested in the market, you should stay the course. During a recession, the stock market typically continues to decline sharply for several months. However, it usually enters bear territory before economists declare a recession and begins recovery a few months before the recession is over. In the case of the current market cycle, it’s already on the way down. Still, if you pull your investments out, it may backfire because you can easily miss the moment the market begins its upward ride. It’s often better to stay invested in avoiding missing out on the upswing, but be mentally prepared for more volatility for the several months ahead.

It’s important to look to history to predict what will likely happen in the future. During the last financial crisis, the market was spiraling down for almost 18 months until it erased 57% of its gains, however during the following economic expansion that lasted 11 years, the stock market returned over 400%. This recession should not be as severe since financial institutions are not nearly as leveraged. The market may fall 40-45%, but no one can predict how much precisely and you may sell at precisely the wrong time. It’s better to prepare for market volatility, but maintain a long term focus, knowing that eventually the market will rebound and bring more gains to your portfolio. This strategy especially holds for long-term investments like your retirement savings or education savings for your kids.

“A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.”

Warren Buffett

Pullbacks in the market are healthy and necessary to keep a bull market going. Over the last thirty-five years, the stock market on average pulls back by over fourteen percent a year. We tend not to remember those  drops because the market tends to finish higher. As an investor, it is essential not to get sucked into the news and realize that events like this happen and usually have a short duration. 


“The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.”

Benjamin Graha


What investing strategies should you consider?

Dollar-cost averaging – it’s best to buy into the market slowly over a few months, this prevents investing at an unfavorable time (it’s impossible to precisely time the market). Also, it’s best to buy investment securities when the market is down. So imagine that by investing gradually over the next few months, you will be getting stocks at a considerable discount.

Diversification – it’s essential to be spread across different asset classes, geographies, and securities to reduce portfolio volatility and exposure to the single stock or even country. The chart below is a good example of diversification:




Buy and hold – it’s important to remember that you should expect a 2-5 year hold time for anything purchased during the recession. If you have short-term liquidity needs, then buying equities during the recession may not be the most appropriate strategy.

Staying calm – Above all else, investors should remain calm and keep a long-term perspective when investing ahead of and during a recession. Emotions can be one of the biggest roadblocks to strong investment returns, and this is particularly true during periods of economic and market stress. Refrain from watching the news and checking your investment portfolio. Put your savings on autopilot. News may negatively impact your emotions, and if you sell under the influence of news, you will likely regret it later.

In a period like this, it’s essential to have financial experts and investment advisors you can trust. At UNest, our mission is to help parents secure their kid’s economic future, and we’re available to answer any questions and put your mind at ease.


About UNest

UNest’s mobile fintech app helps parents save and grow the money needed to fund their children’s education. The UNest team has decades of experience as certified financial advisors, technologists, and entrepreneurs. The company partners with financial industry leaders to offer parents a pain-free way to build the best possible educational future for their children. While student debt in the US has reached a historic level of $1.6 trillion, 70 percent of people in the US don’t know about 529 plans. Only 14 percent are currently using them due to the complexities associated with the account setup and management. UNest demystifies this process with a paperless approach that takes only five minutes to set up. UNest is a fully accredited and registered financial advisor with SEC and FINRA.

Learn more at UNest’s Android app is available for download here; the iOS app is available here.


First Chart: Source: FactSet, NBER, Robert Shiller, J.P. Morgan Asset Management. Data shown in log scale to best illustrate long-term index patterns. Past performance is not indicative of future returns. Chart is for illustrative purposes only. Guide to the Markets – U.S. Data are as of March 31, 2020.

Second chart: Source: Compustat, FactSet, Federal Reserve, Standard & Poor’s, J.P. Morgan Asset Management. Dividend yield is calculated as consensus estimates of dividends for the next 12 months, divided by most recent price, as provided by Compustat. Forward price to earnings ratio is a bottom-up calculation based on the most recent S&P 500 Index price, divided by consensus estimates for earnings in the next 12 months (NTM), and is provided by FactSet Market Aggregates. Returns are cumulative and based on S&P 500 Index price movement only, and do not include the reinvestment of dividends. Past performance is not indicative of future returns. Guide to the Markets – U.S. Data are as of March 31, 2020.

Third Chart: Source: Bloomberg, Barclay’s, FactSet, Standard & Poor’s, J. P. Morgan Asset Management. Guide to the Markets – U.S. Data are as of March 31, 2020.

Blogs and articles contain the current, good faith opinions of the authors but not necessarily those of UNest. The documents are meant for educational purposes only and should not be considered as investment advice or a recommendation of any type.  The documents may contain forward-looking statements.

Ksenia Yudina, CFA, MBA

Founder and CEO

Ksenia is the Founder and CEO of U-Nest, the first mobile app that makes it easy for families to save for college. As an entrepreneur and finance professional, Ksenia has focused on alleviating the impact of student debt on families across the economic spectrum. Previously, Ksenia was a Vice President atCapital Group/American Funds, the largest 529 provider in the U.S. In this role, she played a leadership role in helping parents plan and manage their finances, with a focus on the future well-being of their children. Prior to Capital Group/American Funds, she was founder of a residential real estate company. Ksenia earned her bachelor’s degree in finance from CaliforniaState University Northridge, and an MBA from UCLA’s Anderson School of Management.

Mike Van Kempen

Chief Operating Officer

Mike joined U-Nest in September 2019 as COO. He was previously at Acorns, a financial wellness platform, where he spearheaded the analytics and growth initiatives. Mike successfully expandedAcorns’ paid acquisition strategy, adding over 4.5 million investment accounts. Mike began his career in strategy & analytics at Belly, a Chicago-based loyalty startup in 2012. At Belly, Mike led projects that fueled growth across all aspects of the business, growing the customer base from1,000 to over 11,000 merchants, and accumulating a membership of over 2 million customers.Mike holds a B.B.A. in Finance from Loyola University of Chicago.

Steve Buchanan

Chief Technology Officer

Steve has over 20 years of experience in delivering digital innovations in the financial sector. Steve previously orchestrated product architecture and innovation as a Solutions Architect/ Fintech consultant at Union Bank. Prior to Union Bank, he was Chief Architect and Director of Engineering at Calypso, a Silicon Valley startup, where he architected and built multiple financial solutions. He was also Head of Global Integrations at Globe One in Vietnam where he integrated its Peer-to-Peer lending products into core banking solutions. Steve also built the first ever electronic Equities &Equity Options trading systems for Scottish stock brokers Wood Mackenzie (acquired by CountyNatWest). He is a graduate of Edinburgh University.

Peter Mansfield

Chief Marketing Officer

Peter has built an impressive track record in multiple financial industry segments including payments, credit/prepaid cards and lending. He has played an instrumental role at a succession of financial industry leaders, co-founding companies such as Brand3 (acquired by American Express) and PropertyBridge (acquired by Moneygram), and, as the early stage marketing lead at Marqeta (where he was team member number two), BillFloat and WallabyFinancial (acquired by Bankrate).He has helped fast-growth companies reach an aggregate market value of close to $8 billion. Peter holds a bachelor’s degree in economics from the University of Angila, UK.

Sonya Kidman

Client Relationship Manager

Sonya Kidman is a Customer Success professional with a decade of experience in advocating for consumer through user research and genuine empathy. Sonya specializes in user behavior and regularly attends national and global training sessions in wellness and people analytics tools. Sonya is a true global citizen was born in Russia, grew up in Israel, lived and worked in Canada and NewZealand. That global expertise along with an undergraduate degree in Sociology from Tel AvivUniversity have helped to shape a bullet-prof Sonya's framework to develop a winning customer strategy.

Frank Mastrangelo

Board Member

One part banker and one part technologist, Frank spent his early days with the Annenberg Foundation and PNC Bank. His career path led him to Jefferson Bank, where he led the build-out of its electronic banking platforms, and where he would forge a powerful alliance with The Bancorp co-founder Betsy Z. Cohen. As President and COO of The Bancorp from its inception in 1999 Frank played a critical role in helping the organization become an industry bellwether for branchless financial services and a global leader in payments. For this, he has become a widely respected fintech expert, and thought-leader. Frank was recognized in 2013 by Banking Innovation, a leading industry journal, as an “Innovator to Watch.” and as one of the innovators shaping the future of banking. Frank is a graduate of West Chester University of Pennsylvania.


College Savings Calculator is a hypothetical tool that demonstrates how monthly contributions, age-based asset rebalancing, and tax savings may impact the long-term value of your account, and do not take into account a portfolio’s underlying investment management fees. Calculations assume the private institution cost inflation is 2.8%, public out of state cost inflation is 3.9%, public in state cost inflation is 2.7%. Portfolio is assumed to have only stocks and bonds. Monthly equity returns are based on the historical data from the 10-year track record of the stock market (SPY). Monthly fixed income returns are based on the historical data from the 10-year track record of the bond market index (AGG). The current college expenses are provided by the Actual account performance may differ due to market fluctuations, changes in recurring investments, and asset allocation. The information provided here is for illustrative purposes only and does not represent actual or future performance of any investment option and is not intended to predict or project the investment performance of any security or index.