Will there be a recession in 2024?
Written and accurate as at: Jan 16, 2024 Current Stats & Facts
If Australia goes into a recession during 2024, how prepared is your family? How will it affect your job or business? How will it affect your super or pension?
There is a very strong possibility that Australia will have a recession soon. Like most of the world, the huge handbrake central banks have put on economies with much higher interest rates are starting to bight. With monthly loan repayments rising by around 50% and those increases flowing on to rents as well, families have less to spend and are cutting things back in their budgets. Less spending means less economic growth and if growth across Australia is negative for two consecutive quarters, that is deemed a recession. Other than during Covid, we haven’t had a recession in Australia for decades. History tells us that recession almost inevitably follows periods of interest rate increases within 3 years.
It's time to think about how a recession will affect your business or the business you work for. As we’ve seen several times in the last 5 years, the demographic mix of visitors to town could change, more young people and retirees who don’t have home loans and less middle-aged family people with home loans. Less discretionary spending means businesses selling goods and services that could be deemed luxuries or toys will see less demand. Can you pivot your marketing towards those consumers with little or no home loan who won’t be as badly affected? Are you ready to be nimble with your staffing levels and expenses to trim them quickly if sales fall?
Sometimes recessions spill over into the share and property markets. This doesn’t happen all the time so ‘selling out’ of growth assets like shares and property in your super isn’t sensible. Major studies throughout history have shown that people who try to ‘time markets’ and buy low and sell high end up worse off than those who buy and hold. If it was easy to time markets, we would all be rich. No one’s crystal ball is reliable in the long run.
There are however ways to prepare your super or super pension. Understand what you’re invested in and having strategy to deal with market crashes is key. Come in and we will review your existing investments and explain our 3 Bucket Protection Strategy for free. Now is the time to ensure you have a steady hand on the tiller as the weather looks like turning nasty…
If you think you could benefit from a discussion with a Financial Planner, give us a call on 49467359 of visit www.eclipsefp.com.au There’s no obligation, the first meeting is free and all fees are spelled out clearly in advance. If you’re not sure, try coming to our Retirement Planning seminar in February, keep an eye on our Facebook page for details.
