[Ask TBM] Should You Make Investments During a Recession?
Recessions are usually a cause for alarm, but is it actually a good time to invest? We asked a portfolio manager who works with BDO Private Bank for tips and advice.
Will the Philippines experience recession this year? According to Felipe Medalla, the Governor of Bangko Sentral ng Pilipinas, the Philippines will only experience a “low growth” for 2023—not a recession. The World Bank, meanwhile, expects the country’s economy to lose momentum with its growth forecast set at just 5.7% due to inflation and high interest rates.
Given that the International Monetary Fund (IMF) has warned that a third of the world’s economy will be in recession this year, it is understandable that many are worried. After all, a recession signals a significant downturn in economic activity, which is a cause of concern for not just governments and businesses, but regular citizens as well.
But with stock prices falling across the board, can a recession be a good opportunity to actually invest? For this, we asked Bienvenido Gerard “Obrec” P. Cerbo III, the Portfolio Manager managing Multi-Asset Portfolios and former Trader dealing with Local and Foreign Equity Securities for BDO Private Bank.
What are the misconceptions when it comes to making investments during a recession?
A common misconception is that recessions are the worst time to invest your money and should just keep your money in cash. While it is always good to keep an ample amount of cash/liquid assets in times of recession, investors should also consider putting their excess funds to work.
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