Everyone you ask today about the economy will tell you it’s a time of abundance and plenty, oil prices rising and stock markets bursting at the seams.
JPM’s economists told Business Insider: “The chances of a recession are increasing, an estimated average of 27% each year. with the incoming year having an 18% chance”, as per their findings.
With those findings in mind, JPM’s economists say: “The economy is near the gradual decline of the cycle”.
Not only this, according to John Normand, head of cross-asset fundamental strategy, at JPM: “The US economy is yet to exhibit a recession’s early characteristics”.
But it’s on the way.
How to prepare
“As it stands, investors should be looking to reduce vulnerability in the incoming years”, Normand told Business Insider.
In order to do this, he suggested investors look into more modern, non-traditional, equities and bonds.
He also stressed that: “If, declining profit margins or tightening Federal Reserve policies are to happen; investors should look into defensive strategies”.
JPM’s recommendations, reported by Business Insider, are that investors start shifting their assets and allocating them to different classes, sectors, and geographical regions.
Normand added: “In these periods, the opportunities are plentiful and certainly available during a transition”.
Not only this, but he highlighted corners of the market that perform best in these times: “Judging by historical data, both, Utilities, and Energy Futures have an 8.8% and 7.7%, average in the late cycle return, respectively”.
While the US might be struggling in the upcoming years, GDP in the UAE is expected to grow.
UAE’s economy is going strong
As reported by Focus Economics, the VAT increase and higher oil prices, are expected to constrain public spending. Although, the recent transition from a non-oil economy will support the public sector’s growth, and will further drive the economy into fruition.
Focus Economics’ panellists predict that GDP growth in 2018 will increase to 2.8% while in 2019 it will increase to 3.3%.