Managing Investments in a Recession - Adviser Investments

Managing Investments in a Recession

The necessary shutdowns to combat COVID-19 sent the economy rapidly into recession. Yet after the initial shock, the stock market has proved remarkably resilient. What’s behind this disconnect and how does it affect investment decisions going forward? Chief Investment Officer Jim Lowell broke it down in our recent quarterly webinar*—Take Your Pick: Recession or Recovery?

Please enjoy the excerpt below and click here for the full webinar replay to hear more.   

* * * * *

Jim Lowell: We may be in a serious recession. We know that the Federal Reserve and Fed equivalents around the globe are clearly riding to the economy’s rescue with not just dramatic stimulus measures in terms of past precedent, but also that the rapidity with which they are riding to the rescue of the economy is unprecedented.

That said, they’re doing both of those things for a reason. And some of the points that [Chairman] Dan Wiener and [Director of Research] Jeff DeMaso raised about the fragility of recovery, especially based on the likelihood of having to re-shut down places that have reopened (and of course, we’re wending our way toward another flu season) are going to cast a pall over our ability to feel confident about defending the current recession. But all of that said, it never is far from our mind in terms of thinking about whether or not we’re inclined more or less toward a recessionary event.

We’re risk-aware managers. We are always focused on the managers we invest in right alongside of you in terms of their risk-adjusted performance, not just their absolute return. And our asset allocation is specifically designed to be able to address whether we think we are heading into, in, climbing out of or safely beyond a recession.

So I would say that one of the things that we have done over the last 20-plus years is not necessarily anticipate a recession and make investment moves based on that anticipation, but to never ever put our feet up on the desk and assume that a recession isn’t around any economy’s corner.

* * * * *

Click here for a replay of Take Your Pick: Recession or Recovery? Please contact us at (800) 492-6868 to learn more about comprehensive wealth management solutions.

*Webinar recorded after the market closed on Wednesday, July 22, 2020.

Disclaimer: This material is distributed for informational purposes only. The investment ideas and opinions contained herein should not be viewed as recommendations or personal investment advice or considered an offer to buy or sell specific securities. All investments and strategies are subject to risk of loss; principal is not insured; past performance is no guarantee of future performance. Our statements and opinions are subject to change at any time, without notice and should be considered only as part of a diversified portfolio. Mutual funds and exchange-traded funds mentioned herein are not necessarily held in client portfolios. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed.

You may request a free copy of the firm’s Form ADV Part 2A, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged.

Past performance is not an indication of future returns. We do not provide legal or tax advice, nor sell insurance products. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Always consult an attorney or tax professional, or licensed insurance professional regarding your specific legal or tax situation, or insurance needs.

© 2020 Adviser Investments, LLC. All Rights Reserved.