The economy occasionally heads south. When it does, you have to take a close look at your finances and review, regroup and perhaps recoup.

Real estate in many markets has lost its luster. Bonds are either mired in controversy or priced at levels where it's hard to imagine much of an upside. The yield on cash investments has trended lower with the Federal Reserve's easing of its targeted federal funds rate from 5.25 percent in August to 3 percent in January 2008. As for stocks, well, stocks have been bouncing between the promise of a new tomorrow and the fear of facing tomorrow. What's an investor to do?

Despite several rate cuts and the federal stimulus checks that went out beginning in April, it appears that the U.S. economy is running scared of a recession.

Since we won't know we're in recession until the economists at the National Bureau of Economic Research, or NBER, tell us we're in a recession, it makes sense to think through how we're invested and changes we can make to improve our portfolios or finances now.

To that end, Bankrate has asked a group of investment professionals and investment journalists to weigh in on how an investor should prepare for or invest in hard times.

1. Pay down loan balances and earn a guaranteed return 

Not all financial moves you make when you expect hard times relate to your portfolio. Taking some steps to manage your spending can help you position yourself to survive a financial setback such as getting laid off from your job.

William Suplee IV, CFA, CFP, president of Structured Asset Management in Paoli, Pa., suggests that, "In difficult economic times, often simple things can make large improvements to your personal financial situation.