Financial calm after the storm

New Haven (WTNH) - We've been hearing from experts that the recession may be over. Now that the economy is getting back on track, what steps should regular investors take to get the most out of their money?

Finance expert Paul Schatz from Heritage Capital in Woodbridge answered that question for us on Good Morning Connecticut Sunday morning, and also addressed the issue of government involvement in the economy.

Paul says the financial markets have rallied dramatically since the March bottom, thanks to the economic stimulus package, the Cash for Clunkers program, and several other factors.

However, there may be "unintended consequences" to all the government action taken to stimulate the economy, said Schatz.

"We were staring over the abyss to almost nonexistance," said Schatz of the March bottom. "The Treasury, the Fed, the world pumped tens of trillions into the system. It's not a 'get out of jail free' card or free pass. We're going to pay the price over a period of years and maybe decades."

Paul says that price could be serious inflation.

As for what investors should do next, Paul suggests that every investor ask themselves the following list of questions before investing for the coming month, quarter, or year:

• Is your portfolio prepared for a spike in inflation?
• How will you protect your money?
• What will you do if we see a repeat of 2008?
• How are you positioned for an endless stream of record budget deficits?
• What if the economy doesn’t recover?
• Is your portfolio prepared for job loss?
• Are you ready to see your taxes increase in 2010?

In a nutshell, Paul warns investors to be prepared for the markets to take a sudden plunge. He does not expect them to fall as dramatically as they did in March, but he does expect them to decline sometime in the near future.

For more information from Paul Schatz or to find out more about investing, visit the Heritage Capital website.

Have a question for Paul? Leave a comment on this page with your question and he'll answer it during his next segment.