Service & Trust
International Platform
TLC & You

Investing for retirement in a recession

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. Courage is required to invest and plan for retirement in a recession. However, it is during a recession when investing and planning for retirement can be quite rewarding.

According to Fitch Ratings, a deep global recession in 2020 is now its baseline forecast. The evolution speed of the coronavirus pandemic has necessitated another round of huge cuts to its GDP (Gross Domestic Product) forecasts. It is expecting world economic activity to decline by 1.9% in 2020. GDP for US, Eurozone, and UK will be down by 3.3%, 4.2%, and 3.9% respectively. China’s recovery from the disruption in 1Q20 will be sharply curtailed by the global recession and its annual growth will be below 2%.

The spread of the pandemic and the actions necessary to control it means that full-scale lockdowns across Europe, US, and many other countries have to be incorporated into baseline forecasts. Lockdowns could reduce GDP across the EU and US by 7% to 8%, or 28% to 30% annualised, in 2Q20.

There are some ways to plan for retirement in a recession. They include paying down debt, building an emergency fund, and looking for big and small ways to save money. Putting together a summary budget enables people to track where they spent their money, including spending on credit cards, cash payments, home mortgages, auto loans, education costs, utilities, taxes, insurance and others. From there, individuals can determine their average monthly expenditure.

Recessions also present opportunities for investments. A recession can be the best possible time to begin investing because asset prices often fall hard. Investors can pick up stocks, bonds, mutual funds, real estate, private businesses, and others for far less than they could just a few years earlier. It takes courage to invest when the economy is down. You probably won’t buy at the absolute bottom. You’ll have to watch your portfolio fall a little further after you’ve made your investment. That is why it is recommended that you wade into the market through a dollar-cost averaging plan. These drops shouldn’t even concern you if you won’t be forced to sell early.

TLC, together with its pool of investor funds, is able to use its resources to grow the wealth of its investors. Emerging bargains, as a result of crashing government bonds, credit, stocks, and commodities, are presenting investment opportunities for investors. Our investment strategies have generated profit consistently, as proven by our track record, and should continue to do so in the current market environment. This is the time when there are plentiful investment opportunities for investors to invest and grow their wealth. We track developments in global financial markets to ensure we can achieve good financial returns on our clients’ investments. We are committed to creating opportunities for you to obtain great profits. Let’s make our investments generate more returns. Now is the best time to invest for a brighter future. We can make it happen! Prepare for better times, by letting us, TLC, to become your partner that can guide your financial decisions in years to come.


Leave a Reply

one + thirteen =