During a recession, economic volatility can lead to reduced job security and unstable incomes for millions of people. Let’s hope you are not one of them. Whether you are or are not, we recommend a plan that covers the expected and unexpected results of increased market volatility. 

The right plan can help you avoid disruptions to the achievement of your financial goals – based on your ability to add new savings and generate positive rates of return on existing savings. 

If you live in Greenville, South Carolina, and are planning to retire soon or are recently retired, you may need to adjust your current retirement plan. This includes a reset for your income and investment returns so you can weather the economic headwinds that are produced by recessions, inflation, high interest rates, and other undesirable economic events.

This is where the services of a fiduciary fee-only financial advisor in Greenville, South Carolina, can help you make the right decisions.

A recession can cause major damage to the achievement of your financial goals, so it is particularly important to recession-proof your investments as much as possible.  

There are five investment strategies that you should consider:

1. Allocating your investments across different asset classes, such as stocks, bonds, and real estate, can help reduce your investment risk during a recession. Diversification can provide stability and potential for improved returns even when some asset classes are producing negative rates of return.
2. Invest in companies with strong fundamentals, solid financials, consistent dividend payments, and a long history of weathering economic storms. These companies are more resilient during recessions and may continue to generate positive growth and steady income. Defensive stocks can describe industries that are less sensitive to economic cycles, such as utilities, healthcare, and consumer staples. These sectors can continue to produce earnings growth even when the overall economy is in a general decline.
3. Consider diversifying into alternative investments like gold, real estate investment trusts (REITs), or commodities. These asset classes can produce positive rates of return when more traditional asset classes (stocks and bonds) are in a general decline.  
4. Resist the urge to make impulsive decisions based on short-term market fluctuations. Staying committed to long-term investment goals and avoiding emotion-backed investment decisions can be the keys to success in volatile economies and markets.

Are You Financially Ready? Watch Our Video to Learn More.

Effective budgeting and debt management are two foundational principles of a comprehensive financial plan. They become even more important during market volatility and/or economic uncertainties. 

A Greenville CERTIFIED FINANCIAL PLANNER® (CFP®) can assist you in creating a budget that includes a detailed plan for your standard of living (income, expenses, debt). A well-structured budget allows you to allocate your resources wisely, helping to ensure you are living the way you want to live during volatile times.  

Debt management is equally critical. Review your outstanding debts and prioritize paying off the higher-interest-rate debts first. Consider consolidating or refinancing loans to secure lower interest rates. This approach can reduce your debt burden and free up income for other financial priorities.

A “set-it-and-forget-it” investment strategy can be problematic when managing your risk exposure, especially if there is a recession in 2024. While a passive approach may seem convenient, this investment approach may not fit your financial situation if a recession increases your exposure to risk. 

Relying solely on a buy-and-hold investment approach may lead to unintended consequences that create an increased risk of large losses during periods of economic uncertainty.

Major political turmoil, like the election process we will experience in 2024, can introduce its own set of risks and uncertainties that trigger serious market fluctuations. For example, investor sentiment can react to day-to-day election-related news, which can result in increased market volatility. This volatility may impact a broad range of asset prices, including stocks, bonds, and other types of investments.

This heightened market sensitivity arises from the uncertainty surrounding the election’s potential impact on various sectors of the economy and the companies that comprise the sectors. 

Institutional and individual investors should exercise caution during such times as they grapple with the unknowns of future policy changes and their potential impact on the financial markets.

Election-related concerns, such as changes in government regulations, the tax code, and a $33 trillion national debt, all contribute to the market’s uneasy views of the future. Investors may be more conservative until they see the impact of a new administration that includes the presidency and Congress. 

This lack of clarity and the potential for major changes in market sentiment can lead to major fluctuations in stock prices and other asset classes. As a result, many investors will adopt a more defensive strategy while day-to-day volatility increases.

It’s important to stay informed and consider adjusting your investment strategies based on unpredictable political outcomes and their impact on the markets. This is one more reason to adopt a conservative investment strategy until the outcomes and consequences of the elections are behind us.

Working with a fee-only fiduciary financial advisor in Greenville, SC, and beyond is paramount, especially in the 2024 election year, which can potentially produce volatile market conditions. It’s interesting to note that choosing the right financial advisors can make the achievement of your goals a priority. That is not always the case. Only financial fiduciaries are required to act solely in their client’s best interests, thereby eliminating potential conflicts of interest that could negatively impact your financial well-being.

At Global View, we stand apart from the typical Wall Street firms whose financial plans often seem tailored more toward promoting expensive financial products that generate substantial fees and commissions. Compensation is a potential conflict of interest that can undermine the achievement of your financial goals.

The Global View approach is refreshingly different. As a fee-only firm, we don’t sell investment products for commissions. Our compensation is tied to the achievement of our client’s goals.  

Our sole mission is to help our clients pursue their financial goals for reasonable amounts of risk and expense. To pursue that goal, we have developed a clear, effective planning and investment process tailored to each of our client’s requirements and goals.

Transparency is at the core of what we do. 

Our role is very straightforward. We help you accumulate, preserve, and distribute more wealth than you might on your own.