Five ways to protect your portfolio in a recession
High inflation and interest rates will affect companies’ top and bottom lines. But there are ways to mitigate this risk
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INVESTORS are becoming nervous over what comes next. In the United States, both the Nasdaq Composite Index and S&P 500 Index have tumbled into a bear market, and are down 31.4 and 21.8 per cent year to date, respectively.
To make matters worse, the US Federal Reserve has continued to hike interest rates aggressively to contain red-hot inflation which hovers at a four-decade high. These rates are now flowing through the global economy, pushing up borrowing costs for everything from mortgage loans to corporate debt.
The combination of high inflation and surging interest rates is anathema to consumer sentiment and looks poised to adversely impact the top and bottom lines of a wide range of companies. Already, technology companies such as Meta Platforms, PayPal and Sea are laying off staff due to slower demand for their products and services.
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