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Steering Through Recession: The Prudent Investor's Compass

The ebb and flow of economic tides are a given, yet 2023 seems to be ushering in more than just gentle waves. A majority of our client base is on the lower end of the risk scale as they tend to steer more towards wealth preservation rather than explosive growth. Yet not all investors are of the same mindset and many are looking at the short-term blip as a good buying time. Let us preface that we do not try to time the market and if an acquisition makes sense within your strict parameters, then fire away! That being said, we are in a holding pattern as we believe there is a disconnect between short-term returns and long-term downside risk. Let's dig into some of the data:

A recent survey by the World Economic Forum reveals that 20% of global respondents foresee a recession loom​ing. Central banks are put in a difficult position between too much tightening (recession) and too little (inflation).

Meanwhile, the US economy has, so far, paddled against the current, yet the near 99% probability of a recession in the coming year, as suggested by The Conference Board, is a clarion call for preparedness.

On the global stage, central banks are tightening monetary policies to curb inflation, a move that nudges us closer to a global economic downturn. The IMF's forecast also echoes this sentiment, indicating a trail behind the historical growth average.

In the US, we are getting some mixed signals in forward-looking indices. Consumer confidence has become a bit more negative falling 5.7% in September from the August number although still off the lows we saw at the end of 2022/beginning 2023. This is in the face of lower household savings and rising consumer debt defaults.

The biggest issue though will come in the form of employment. As new orders decline and corporate profits take a hit, employment will begin to deteriorate. We have yet to see widespread initial unemployment claims, however we are taking a look at CEO confidence as a guide. If CEO's aren't excited about the near future, employment and investment will take a hit.

So what does all of this mean? Well, in such turbulent economic times, the prudent investor seeks a compass. Professional portfolio management is that compass, offering a route through the uncertainty. Forging a business plan and adhering to both a risk profile and proven systems will help in any cycle, but particularly when things don't go so well.

At Duckridge Realty Advisors, we specialize in navigating through economic uncertainties, ensuring your assets are well-positioned to not only withstand but capitalize on the unfolding scenarios.

The journey towards financial resilience starts with a dialogue. Reach out to us, and discover how Duckridge Realty Advisors can guide you through the economic landscape, transforming uncertainties into a roadmap towards continued financial growth.

Also, if you would like a complimentary sample of our more comprehensive market report, then simply email us for a copy.


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