IMF Predicts Another Financial Meltdown

Published / Last Updated on 17/12/2018

2019 could see another financial meltdown according to the International Monetary Fund (IMF).  It has been 10 years since the last one and we are being told daily in the press that seriously high debt levels, Brexit and US-China trade wars, are all adding to uncertainty in global markets.

Tips to protect your finances:

Start or Continue Saving – Emergency Fund

Financial crisis can lead to job losses, start a savings plan and try to build at least 3 to 6 months of expenses should the unthinkable happen.

De-Risk Stock market-based pensions and investments

For the older generation, possibly move your investments away from equities and into bonds and cash.

For the middle generation again considering de-risking with more of your investments in bonds and cash, remember to move them back when you think the markets are looking better, or you potentially could lose out.

Check your pensions or check with your adviser about moving your investments between shares and bonds or cash parking.

Savings

Look at your savings and the possibility of moving them around, as Banks could also suffer from market crashes. The UK’s Financial Services Compensation Scheme protect the first £85,000 you hold with each financial institution but bear in mind Lloyds, Halifax and Bank of Scotland are brands of the same banking group. Do they have a separate banking licence for each?  Being under the Lloyds Banking Group you may mean you only have one £85,0000 protection level.

Mortgages and House Prices

Many commentators are predicting house prices will be level in the UK in 2019 and fall in London by 2%. Be price savvy and barter to get the best price when buying a property. If you require a mortgage look at five-year fixed deals. You know exactly what you are paying for the next five years so no nasty surprises.

Short Selling – Bet Against The Market?

Short selling is buying stock futures options (at a fraction of the cost of the real share) using a broker or exchange-traded fund (ETFs) before you own actually them (technically you ‘borrow’ them i.e. you have bought them in the future at a future price), the idea is then to sell the shares at current market value (before you actually own them) and then buy them at a lower price later when markets have fallen. In short, you never really owned them, you just sold them at a higher prices than you bought them for later.  This is a form of gambling and is a high risk strategy.

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