A couple of weeks ago, the Bank of England responded to rising prices by increasing interest rates by 0.5%, taking them up to 1.75% – the biggest spike in 25 years.
Predictions were also confirmed by Bank of England forecasts that a recession will likely begin in the final quarter of this year up until the end of 2023. Although not expected to hit as badly as the previous downturn prompted by the global financial crisis of 2008, it is likely to last as long.
What does this mean for my investments?
Looking at historical data, we know that stocks tend to rise right into a recession and fall during it. However, it’s impossible to forecast, as both markets and economies are unpredictable.
At PM+M, our expert financial planners understand that the market can be volatile, and as such, aim to focus on the long term. Our Managed Portfolio Service (MPS) is a bespoke investment portfolio produced by us, and managed in collaboration with AJ Bell, to make your life easier.
Working together, we continually monitor the market, conducting ongoing due diligence in relation to the funds held within the MPS portfolio. We proactively make fund and asset allocation changes when we feel it is necessary to manage volatility and drive long term growth. Our MPS aims to provide you with the best combination of investments to maximise your potential returns with a level of risk that suits you. Furthermore, you will not have to sign paperwork each time we recommend changes; we would simply implement them for you.
Of course, when a recession is predicted, it is completely normal, and understandable for investors to be worried. Speak to your financial planner to seek reassurance that this is all part of your investment journey. Resist changes to your long-term strategy during times of market volatility – think of the end result and the eventual rewards.
Get in touch
If you have any concerns about the effect of recession on your portfolio, don’t hesitate to get in touch with our financial planning team via financialplanning@pmm.co.uk.
The value of investments can fall as well as rise. You may not get back what you invest.
The information contained within this article is for guidance only and does not constitute advice which should be sought before taking any action or inaction.
