- September 7, 2022
- Posted by: Administrator
- Category: Wealth Management
A looming recession seems to be making the headlines of every major media outlet nowadays. For those looking to invest, it can feel as though uncertain and complex times lie ahead. However, there are always practical courses of action to follow and steady ways to ensure your money is working for you, even when it seems like the market is falling apart at the seams.
If you’re looking for a place to handle your wealth management in Spokane, our Moulton Wealth Management, Inc. team is here to help. At Moulton Wealth Management, Inc., we utilize our financial experts to help you invest and manage your assets safely and in the most effective way as we look toward a potential season of economic strain. Gearing up for this time can be challenging to estimate, but we can help.
What Do We Know About the Recession?
While it can be difficult to pinpoint exactly how and when a recession occurs, most economists have seen some familiar patterns from previous recessions. These patterns can help cue us as investors and asset holders to redirect our current plan of action to prepare for some potentially rocky times.
Although not ideal, an economic slowdown doesn’t present enough monetary threat to earn itself the title of “recession.” An economic downturn can, however, become a recession when excess growth follows very little growth, which creates a problem known as inflation.
Inflation and How It Affects Investors
Inflation is a term thrown around a lot nowadays, but what does it mean for someone who has money in the market outside of your groceries, and gas is a little bit more expensive? In essence, inflation means that the tangible value of an investment will begin to erode or lessen over time.
As an investor, this could mean a season where the return you are receiving from your investments doesn’t match your standard of living or the price at which you hope to sell an asset. This could present problems in the wealth management world, and it’s essential to evaluate what the best course of action might be during this time.
Wealth Management – The Good and The Bad
A potential recession is affected by many factors, both in the short-term and the long-term. Some of those factors may have seemingly positive effects; however, they could end up being nastier down the road and vice-versa.
Recently, we saw a significant decrease in the percentage of unemployed persons and a solid increase in the amount employers pay their workers. This is excellent news as it means more and more people are cycling money into the economy, thus eliminating the need to print more bills.
However, it could be bad news down the road if the hiring rate, along with increased wages, continues. The Feds are attempting to get inflation under control as it is, but an economic slowdown followed afterward by manic and rapid growth could cause prices to skyrocket with wages trailing slowly behind.
To be sure, a recession is a nuanced event, and while a time when the hiring rate is higher might be ideal, it could also signal the calm before the storm. However, it’s always important to remember that storms pass like recessions; it’s just a matter of finding the most effective and safest ways to prepare for them.
What’s The Best Way to Prepare?
In a situation like this, the best action is to seek financial advice from trusted wealth management institutions. In the Spokane area, we at Moulton Wealth Management, Inc. offer some of the most trustworthy and data-informed information on managing your assets and portfolio.
One way that we help ensure our clients’ investments are being adequately managed is through our process of asset allocation. This process was created as a way to reduce any risks that one asset might have on another. Of course, it does not guarantee total protection against overall factors like market risk, but it can be incredibly helpful in protecting an entire portfolio.
Diversifying assets into different baskets or groups allows you to keep your whole portfolio safe, even if a particular investment isn’t performing well. During a recession, this is key, as it’s not entirely clear which sectors and industries will be hit the hardest. So to minimize or even eliminate economic threats to your assets, this is an excellent course of action that we highly recommend.
Our asset allocation process is highly recommended due to our complex mathematical models. The much simpler financial concept of diversification should not be confused with our use of asset allocation.
How to Manage Your Wealth & Portfolio
To best manage your portfolio, it’s essential to look at multiple vital factors and what intentions you have with your assets. Our group uses tactical risk management to ensure that your wealth management is perfectly aligned with your goals, with nothing falling through the cracks.
With a potential recession ahead of us, it’s crucial to prioritize the protection of your assets and investments. At Moulton Wealth Management, Inc., we take the time to learn about your overall objectives, time frame, and risk comfortability before helping you make any decisions regarding your portfolio.
A recession can present a grave threat to many people’s portfolios. However, with the proper care and management, your assets can be distributed and held safely while retaining their value. Not only that, but we continually take the time to help you readjust if anything unexpected comes along.
The Washington State Dept. of Financial Institutions offers a great resource for researching your next financial advisor or wealth advisor.