The recent financial sector crisis in the U.S. has analysts concerned about a downturn in the economy and the possibility of a recession.

The precarious nature of the global economy is also worrying Canadians about their financial security in the coming months and years. CTV.ca spoke to a pair of financial planners about how Canadians can recession-proof their finances.

John De Goey is vice-president of Burgeonvest Securities and author of "Professional Financial Advisor II." Anton Tucker is vice-president of TriDelta Financial Partners. They offered advice on what Canadians need to know about investing, real estate markets, and household borrowing and spending during tough economic times.

Investments

When it comes to protecting and growing retirement plans and stocks, De Goey warns Canadians not to be rash or to "react to what you see on TV and read in the papers." He says that the recent volatility in the market has happened before and will happen again, but most investors should have a long-term strategy.

The key is having diverse portfolios, says De Goey. That means not only dividing investments between stocks, commodities, bonds, or cash, but also making sure that a lot of money is not placed into investments that exhibit the same characteristics or within only a handful of companies.

De Goey also recommends that people rebalance their portfolios.

"For people who are not retired, you're a net saver, you should be buying low. So, right now, because stocks are temporarily on sale, some investors should be putting more money in stocks, if they have a strategic mix that makes sense for them," he said.

If retired Canadians need to, they should sell bonds and not stocks. De Goey noted that stocks have been generally selling at depressed prices recently.

Housing

Most homeowners with one property would be better off staying put rather than selling just before or during a recession, says Tucker.

"In terms of how to prepare for a coming recession, my advice is to focus on the most efficient payment plan to get the mortgage reduced. It's particularly important if a recession is about to hit," he said.

Tucker says he would also tell most renters not to buy a home at this time. He said that Canada's housing prices are likely overvalued and a drop in prices (to a smaller extent than what has occurred in the U.S. over the past year) is likely in the coming year.

"Our belief is that now is not the time to assume risk but to reduce or avoid risk," he said.

De Goey agreed. "I think you'll be rewarded for waiting because I think the prices will drop," he said.

Borrowing money

The precarious period before a recession is not the time to borrow money, says Tucker. If a new car isn't necessary right now, "absolutely don't" buy one," he said.

Tucker says most people should borrow money for only essential needs. He also said paying down debt often gives a better return than investing the same amount of money.

"If you pay down your debt or prepay the balance on a loan, when you do this you're getting an effective guaranteed return of the interest rate that the debt charges. So, you're making the 18 (per cent) or whatever the interest is without speculating and it's an after tax return."

Spending

Canadians will need to conduct honest assessments of their employment situation in the coming months to determine their spending parameters, says De Goey. He said that tough economic times are generally a time to re-evaluate spending and household budgets.

"(Jobs) that seem to be safe may not necessarily be safe, and that also goes for your spouse," De Goey noted.

De Goey and Tucker said that if an individual's job situation is precarious, he or she should not commit to unnecessary medium- to large-scale purchases.

"(Economic downturns are) a time for caution, not a time for extravagance," Tucker said.