Recession: Soft or Hard Landing, or No Recession at All?

What You Need to Know

Annuities may limit how much holders can participate in market gains.
Many clients are still focusing on avoiding losses.
Limited access to market gains might be better than nothing.

A few years ago, my family visited the headwaters of the Mississippi River in northern Minnesota.

As you walk across the Mississippi, the rocks can be slippery.

If you step on a rock, there’s a chance you could slip and land softly on a sandy portion of the river bottom, but you could also slip and catch smaller rocks and sprain your ankle.

It could really go either way.

When it comes to national economic discussions, this year has started to move toward whether an impending recession will be a soft or hard landing.

Nobody knows for sure what’s coming.

However, it does present an opportunity for financial professionals to talk with their clients about strategies they can implement now to help meet their financial goals.

As you prepare for client meetings, ClearBridge Investments’ Anatomy of a Recession is a good place to review leading indicators in the United States economy.

ClearBridge Investments is a specialist investment manager of Franklin Templeton.

The interactive recession dashboard tool currently shows a slowdown in U.S. economic activity.

Franklin Templeton also conducted an online survey in partnership with The Harris Poll that focused on the sentiments of the American worker.

Two key findings to note:

66% of American workers report experiencing negative effects due to the current economic environment.
The average expected retirement age increased to 65, from 62.

The issue of whether the U.S. economy suffers a soft landing or a hard landing may be irrelevant.

It can make for great speculation on cable news, but American workers fundamentally feel anxious and worry about their financial future.

This presents an opportunity for financial professionals to ease these anxieties and help clients navigate whatever economic circumstances may come their way in the latter part of the year.

The U.S. economy may fall into a recession. Or, it may not.

We really don’t know.

Our job is to help clients set themselves up for financial success by focusing on two core strategies aimed at reducing concerns of market volatility.

Move into the market slowly.

After the concerns about the banking sector and fears of a recession, people have been moving to perceived safe havens.