Recession and Investing Strategy and Approach

The UK economy is expected to experience a sharp downturn in 2023/24, resulting in recession and increased unemployment1. On 4th February 2023, the Bank of England raised interest rates from 3.5% to 4%2. Increased interest rates will see people making economic cutbacks and potentially investing less.
Firstly, let’s look at exactly what a recession is:
A recession is a period of economic decline where the growth rate of GDP (output) falls. In response, trade takes a downturn; usually over two financial quarters (or more) in succession.
According to the Collins Dictionary, the definition of a recession is: a temporary depression in economic activity or prosperity” – (note the term “temporary”). Don’t confuse recession with an economic depression, which lasts a lot longer.
In terms of investing, having the stamina to weather any financial storm is key. So, the first rule in riding a recession wave is, hold your nerve.
The second rule is: invest wisely.
Assets that are speculative, cyclical or with Highly Leveraged Transactions can be higher risk investments.
To avoid high-risk investments, talk to an Independent Financial Adviser or a wealth manager.
A recession is a great way to benefit from high quality assets at reduced prices. It can be a market for opportunity if you keep a close eye on the performance of the companies you are thinking of investing in.
Avoid becoming fixated on the highs and lows of the stock market and focus on your goals instead.
Here are three ways to navigate your way through the recession storm:
Over the last 45 years we have managed clients’ investments when markets have risen as well as dipped.
We have joined forces with Brooks Macdonald, LGT Wealth and Charles Stanley because they pride themselves on being leaders in risk management and delivering returns.
Keeping your portfolio on track and in line with your objectives, we take the appropriate amount of risk in order to achieve your financial goals.
Carefully analysing your investments by using in-house technology, robust processes and decades of experience, we keep you informed on the status of your portfolio.
We offer advice to people who are both new to investing and seasoned investors. Our highly qualified professional Independent Financial Advisers are available throughout the UK to talk to you in person, via video call, or on the telephone.
We look forward to talking your options through with you.
Book an appointment with an Independent Financial Adviser now.
1.https://theconversation.com/whats-in-store-for-the-uk-in-2023-heres-one-economists-view-197484#:~:text=the%20UK%20economy%20is%20expected,pledge%20to%20boost%20economic%20growth
2.https://www.bankofengland.co.uk/explainers/why-are-interest-rates-in-the-uk-going-up
3-4.https://www.investopedia.com/ask/answers/042115/whats-best-investing-strategy-have-during-recession.asp
Lloyd & Whyte (Financial Services) Ltd are authorised and regulated by the Financial Conduct Authority. Registered in England No. 02092560. Registered Office: Affinity House, Bindon Road, Taunton, Somerset, TA2 6AA. It is important to take professional advice before making any decision relating to your personal finances. Information within this newsletter is based on our current understanding of taxation and can be subject to change in future. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested.