Bryden Teich, partner and portfolio manager at Avenue Investment Management, joins BNN Bloomberg to talk about market resiliency amid economic slowdown. He currently likes AutoZone and Alimentation Couche-Tard.
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We are heading towards a recession sometime later this year or into next year: Portfolio manager
As the global economy continues to grapple with the aftermath of the COVID-19 pandemic, concerns are growing about the possibility of an impending recession. Many economists and financial experts believe that we are heading towards a challenging period, with the potential for a significant economic downturn later this year or into next year. One such expert is the portfolio manager who, based on their analysis, is sounding the alarm bells.
A portfolio manager is responsible for overseeing and managing investment portfolios, making them well-versed in analyzing market trends and economic indicators. With their finger on the pulse of various industries and asset classes, portfolio managers play a crucial role in assessing the overall health of the economy. Their predictions, while not foolproof, are often valued by investors and financial institutions.
According to this particular portfolio manager, several factors indicate an impending recession. Firstly, the pandemic’s long-lasting effects on various sectors have yet to fully manifest. While economic recovery has been witnessed in some countries, many others continue to deal with the brunt of the crisis, particularly in terms of unemployment rates and reduced consumer spending. These factors directly impact businesses’ profitability and ultimately contribute to an economic slowdown.
Furthermore, inflation concerns have been on the rise. Higher inflation rates have the potential to erode purchasing power and put a strain on businesses and consumers alike. This can lead to reduced investment and consumption, two key drivers of economic growth. The portfolio manager believes that ongoing government stimulus and relief measures have only temporarily masked the underlying inflationary pressures. As these measures taper off, inflation could skyrocket, further exacerbating the recessionary risks.
Another aspect that supports the portfolio manager’s forecast is the potential impact of geopolitical tensions. Trade disputes and political uncertainties have become increasingly common in recent years. The manager argues that these conflicts, particularly between major global powers, can disrupt international trade, dampen investor sentiment, and create economic volatility. With tensions between nations growing, the potential for a recession becomes more plausible.
However, it is important to note that economic predictions are never entirely accurate, and there are always opposing viewpoints. Some economists argue that substantial government spending, coupled with pent-up consumer demand and a potential boom in certain sectors, could propel the economy forward. They believe that economies have displayed resilience in the face of adversity in the past and may recover quicker than anticipated.
Ultimately, whether we are heading towards a recession or not, it is wise for individuals and businesses to be prepared for any economic uncertainties. Diversifying investments, reducing debt, and maintaining an emergency fund are some of the steps that can buffer the impact of a potential downturn. Staying informed about economic trends and seeking advice from financial professionals can also help navigate challenging times.
In conclusion, the portfolio manager’s warning about an impending recession provides valuable insight into the potential risks facing the global economy. While their predictions should not be taken as gospel, they serve as a reminder for individuals and businesses to be prepared for economic uncertainties. By taking proactive steps, it is possible to mitigate the impact of a recession and emerge stronger on the other side.
Portfolio manager predicts imminent recession in the coming months or early next year appeared first on Inflation Protection.
