The Black Stratton Group - ScotiaMcLeod Markham

Economies, like stock markets, move in cycles, experiencing peaks and troughs while trending higher over time. The troughs can be challenging, but it’s important to remember that they don’t last forever.

Recessions are short-lived

Technically, a recession is defined as two or more consecutive quarters of negative economic growth. In real terms, it’s a period of slowing demand, rising unemployment, reduced investment, and weaker corporate profits.

In some cases, recessions are accompanied by deflation — a sustained decline in prices caused by reductions in personal spending and investment. Canada’s last recession was in 1990-1991. Every recession is different, and the good news is that these downturns have a limited lifespan. Since the 1930s, they have typically lasted between six and 16 months.

Your portfolio

Still, it’s a good idea to ensure that your portfolio is positioned to withstand current economic conditions and is positioned for a future rebound.

Here are two ideas that can help in an uncertain economy:

• Focus on companies with highprofile brands, strong balance sheets, and low debt loads. Market leaders with deep pockets may gain market share as weaker competitors fail.

• Hold high-quality bonds and other secure fixed-income instruments for stability and potential gains. These are especially valuable in deflationary periods, since the buying power of their returns increases.

We can help ensure your portfolio reflects your investment objectives and is prepared for all economic and market climates...

 

Click here to read full Insights PDF...