Nearly 4 in 5 advisers say the U.S. economy is in recession

Financial Advisors

Americans are not yet in a recession, according to the official definition of a recession1. But despite what many economists say, advisers on the ground take a different view.

Recession Concerns Dec 2022 Best Performing Small Caps Dec 2022 Worst Small Caps Dec 2022 Recession Recession KLA Corp Recession Concerns Earnings Forecasts Recession and Depression

In a survey of nearly 200 financial advisors participating in SmartAsset’s SmartAdvisor matching platform, nearly 77% of advisors said Americans are in or will soon experience a recession . Here’s why they’re eyeing a potential recession and the moves they recommend for individuals to strengthen their finances.

It is important to minimize the impact of the recession on investment portfolios. Find a financial advisor to help you today.

Gates cap management reduces risk after rare down years

Gates Capital Management’s ECF Value Fund has an impressive track record.A fund that invests in event-driven equity and credit strategies (formally known as the Excess Cash Flow Value Fund) Read more

Nearly 77% of financial advisers say we are in, or are about to head into, a recession

When asked, “Do you expect the U.S. economy to enter a recession within the next 12 months?” approximately 46% of advisors surveyed said yes, and approximately 31% said they are already in recession. I answered that I thought I was falling into it.

Nearly 15% of respondents said they are not currently in a recession and do not believe a recession will occur within the next 12 months. Nearly 8% of respondents also chose “Other, please specify” for more detailed analysis.

Advisor responses in this survey echo the sentiments of previous surveys by SmartAsset. In August 2022, SmartAsset conducted a survey asking advisers if there were signs the US economy was headed for recession. At the time, 43% of advisers said yes, and 37% said the economy was already in recession.

The survey responses last August came after the US government said gross domestic product (GDP) had fallen by 0.9%, marking the second straight quarter of negative GDP. When GDP is negative for consecutive quarters, some analysts classify it as a recession.

Inflation reached 9.1% in June 2022, which did nothing to ease recession fears. Additionally, the S&P 500 and the Dow Jones Industrial Average (DJIA) plunged.

Since then, US GDP has delivered positive growth in the last two quarters of 2022. Inflation has also leveled off. But despite these signs of economic boom, advisers still expressed concern about the possibility of a recession.

Why Advisors Say There Are Signs of a Recession

Rising interest rates, high inflation, and the recent collapse of several banking institutions were cited by many of those who said a recession was coming or was coming soon.

One respondent said, “I think there will be some kind of recession due to higher interest rates to counter the inflation problem.”

Another said, “Rising interest rates were pushing us in that direction. I think the banking crisis will push us to the brink.”

One survey respondent said the strength of the U.S. workforce and consumer base would make any recession within the next 12 months short-lived.

“We expect the economy to enter a recession by 2024 (first quarter), but a mild recession driven by higher borrowing costs and a tighter money supply,” one respondent said. “Thanks to a strong workforce and resilient consumers, we will emerge from this situation fairly quickly.”

Advisors who answered “other” had a variety of reasons. One person predicted that there would be a recession, but not a full-blown recession. Another predicted a recession in two years instead of one.

Advisors say how Americans should prepare for recession

To prepare for a potential recession, some advisers have encouraged Americans to rake in additional funds for emergency spending and ensure they delay unnecessary purchases.

“The strategy is to increase (and) maintain cash reserves, own higher quality assets (both stocks and bonds), and limit the amount of discretionary spending (i.e. jet ski purchases We can wait a few more months),” one of the advisers replied. .

Some advisers suggest investors take advantage of current Certificate of Deposit (CD) rates while adding quality assets to their portfolios.

“Build a short-term money bucket,” wrote another adviser. “Continue to invest and save while realizing that you can buy at a discounted price compared to years past.”


More than three-quarters of advisors surveyed by SmartAsset said they are currently in a recession or expect to experience one within the next 12 months. Some advisers advised individuals to bolster their cash reserves and investment savings for a recession.


The survey data for this report was collected by SmartAsset between March 29, 2023 and April 12, 2023. SmartAsset asked financial advisors, “Do you expect the US economy to enter a recession within the next 12 months?”

Of the advisors surveyed, 197 responded to this question.

SmartAssets also asked, “Please describe what you believe is going to be a recession in the next 12 months,” and “If you expect a recession in the next 12 months, how will you prepare your clients? Would you like to advise me?” he asked.

1National Bureau of Economic Research (NBER)

Recession investment tips

  • One of the benefits of working with a financial advisor is that you have someone whose objective analysis can help soften the investor’s emotional reaction to economic uncertainty. Finding a qualified financial advisor is not that difficult. SmartAsset’s free tool matches you with up to 3 financial advisors serving your area and allows you to meet with advisors for free to determine which one is right for you. increase. If you’re ready to find an advisor to help you reach your financial goals, start now.
  • SmartAsset’s free asset allocation calculator makes it easy to estimate the best way to adjust your investment portfolio given your timeline and risk profile.

Questions about our research? Contact [email protected].

The post says nearly 4 out of 5 advisors say the U.S. economy is in recession – or will be in recession within 2023 – survey first appeared on the SmartAsset Blog it was done.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *