It’s not just the U.S. that’s facing an economic downturn. According to the British Chamber of Commerce, the United Kingdom could be facing a major recession within as little as three months. The BCC carried out a survey amongst it’s 5000 members across all industry sectors. It’s economic advisor, David Kern, said the results showed a ‘menacing deterioration’ in Britain’s prospects.

‘We are now facing serious risks of recession,’ he said. ‘The outlook is grim and we believe that the correction period is likely to be longer and nastier than expected.’

On the same day, an article in The London Paper, gave a run down of the industries and sectors that were most likely to prosper or fail if the UK experienced a full blown economic recession. Here’s a summary of the article.

UK Credit Crunch Winners

Pawnbrokers

The National Pawnbrokers Association has experienced a 30% increase in business in the past 6 months. As banks make it harder to borrow, growing numbers of people are pawning their valuables to get an instant cash injection.

Budget Retailers

Customers are shunning upmarket grocery stores such as Waitrose and Marks and Spencers in favor of budget chains such as Lidl, Morrisons and Asda. Discount supermarket chain Aldi has reported a 25% increase in sales since the beginning of 2008. Cut price clothing chain, Primark has seen profits rise 22% in the 6 months to March.

Dating Websites

The online dating agency, Plentyoffish.com has reported a four-fold increase in new signups in the last two months. Website manager Steve Moylan reckons people are looking for ways of meeting potential partners without going out and spending loads of money. “Single people living alone are feeling the pinch more than others” he says.

Low End Hotels and Restaurants

To money conscious consumers, budget hotels and eateries are a far more attractive option than their pricier rivals. Bob Cotton of the British Hospitality Association says,
“We’re not seeing the same adverse impact on the hospitality industry as we did during the last recession.” This is because people have got into the habit of eating out and staying in hotels. But it is the budget end of the market which is doing best.
He added “Fast food outlets such as Burger King and McDonalds are showing real growth, as are the budget hotels”

Takeaway Food

The UK’s best known pizza chainis currently enjoy a brisk trade. Sales in the 16 weeks to April 20th reached £105.3m - 21.3 % up on the previous year. CEO Chris Moore commented, “we benefit from an economic downturn because people spend less money going out and more on staying in”

Bailiffs

As more and more people are unable to pay back loans and court fines, it’s the bailiffs who come knocking to collect the money. The Martson Group, a national bailliff company is receiving 1500 cases a week of unpaid fines issued by magistrates courts at one branch alone. Manager Mike Marrs says ” business is definitely growing….and the industry looks set to get stronger as the economic downturn continues”

Bicycle retailers

As fuel prices escalate, many are choosing to leave their cars at home and cycle instead. Whilst the new car market fell by 6.1 % compared with figures taken in June 2007, bicycle retailer Halfords says profits have surged by 7.2% in the same period.

UK Credit Crunch Losers

Estate Agents

The end of the UK property boom of recent years is well and truly upon us. Estate agency branches are closing at the rate of 150 a week. some predict that a third of the countries 12,000 firms will be out of business by December 2008.

The Construction Industry

Denise Dersin of Builder magazine says that 30,000 jobs are expected to go in the trade this year. Persimmon, a mpajor British housebuilder recently announced that it would cut 1100 jobs.

Removal Companies

Fewer people buying and selling properties means less people moving house. This decline has seen the removal business’s worst period for 20 years. Hundreds of workers have been laid off according to the British Association of Removers..

The Internet Boom Of the 1990’s

The new economy bubble shone brightest before it burst. Young geeks moved from the back rooms to the board rooms, forming their own dot com companies, making their own rules and belief systems. What they never had was solid, old-fashioned profits.

The story of internet startups in the 1990’s and how their some of their founders led wildly excessive lifestyles before their companies values collapsed.
TheGlobe.com, an internet startup founded in 1994. After going public with it’s stock, it recorded the largest first day gain of any IPO in history.

Watch the video

A look at the current causes of economic recession in the USA from a UK persepective.
Banks are worried about lending. Ben Bernanke the Chairman of the Federal considers a stimulus package to re-invigorate the economy.
BBC News Coverage of The US Economic Recession

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Tips For Investing In Gold

10 Commandments For Investing In Bullion
There are some ways to protect a stock portfolio, and increase leverage, through investing in bullion, which cannot be found in any other investment. For one thing, bullion can be kept at home and traded at the local store. Many of the investors who survived the 1929 stock crash did so by using their gold. The more volatile the economy becomes, the higher the demand for bullion grows. The more risk banks’ take one, the higher the price of bullion grows.

There are two main bullions traded in North America, gold and silver. Silver is starting to interest many investors because the stock piled supply is gone. Every year the demand outstrips the supply by a larger percentage.
However, investing in bullion is not risk free. An investor can lose if they do not manage their portfolio wisely.

1. Volatility Increases the Value of Bullion

In most cases, when fears increase, inflation climbs, banks fail, stocks spiral in a bear market, and the gurus stop making predictions then bullions increase in value.

2. Timing is Everything

Many investors like to follow the reports, however, most of the time the moment has passed by the time the report is released. To pick the right time to buy and sell bullion the investor needs to take a global look at the markets. The central banks are not the ones to follow – in fact, they are the ones following the trends.

Bullion investors should be leading the markets, taking advantage of the economy dynamics, and paying attention to the non monetary considerations.

3. Do Not Trust Strategies

Bullion does not follow the strategies and trends the way other markets do. Returns from a “buy and hold” strategy can overcome inherent volatility. Many investors try to outsmart the market by hyperactive trading. Success depends on the occurrence of “fat tail” events that lie outside the trading models.

4. Beware Passive Investing

Many investors sit on bullion as if it was cash that can be sold at a profit when they want to sell, whenever that is. This is not true. It is impossible to decide one morning to sell some bullion and earn a bit of extra cash without understanding what is happening in the world.

5. Invest in Mining

Equities of mining companies offer more leverage than ownership of a metal. Metal equities appear expensive in comparison to regular companies because they contain an imbedded option component for a possible increase in the metal’s price.

The share price sensitivity to a possible increase in metal price is related to the cash flow from current production.

6. Gold Fever

Bullion is a solid investment, but being caught up in gold fever. Avoid offbeat “exploration” mines with little or no current production and large appetites for money. Speculate only with solid companies who have done their research.

7. Bullion Coins

When buying bullion, do not accept certificates. If the gold is to be stored, then expect it to be stored in a segregated vault, subject to unscheduled audits. Better yet, if possible, store the gold yourself.

Do not value a coin on the ‘mint’ value it has. Dealers may try to increase a coin’s value based on the year it was minted, or a certain face value it may have. Bullion is invested based on its purity, not its face value.

8. Bullion Purity

Not all bullion is the same quality. There are different purities. Buying bullion from a less than reputable dealer may have the investor with a greatly depreciated portfolio.

9. Do Not Trust the Gurus

Gold is a controversial, anti establishment investment. Its value is not controlled by the banks, or by a single government. Conventional financial media and brokerage house commentaries will not help the gold investor.

10. Observe the Intangibles

A natural disaster, a pandemic, an airline crash, can send the price of bullion far higher than its current price – by several multiples. This is what gold investors wait for.

These 10 commandments of investing in bullion can help an investor build wealth and protect their portfolio through the next few decades.

About The Author

Mark Walters is a third generation entrepreneur and author. He offers free training and investing videos designed to speed you towards financial independence at http://www.CashFlowInstitute.com

Vice stocks, sin funds, and ETF’s to beat the recession

Don’t Let a Recession in 2008 Slow Your Portfolio, Sin Funds and ETF’s Save the Day
By Al Vig

This month marks the worst January in the history of the stock market. With the housing bubble bursting and the dollar fading the future for US investors doesn’t exactly look promising. It seems like anything our friends at the all mighty Federal Reserve try to do misses the mark every time.

Is it time to shake things up in Mr. Bernanke’s fleet of Harvard economic geniuses, or does congress need a slap in the face and a lesson in long run economics? If you share my opinion we need a large helping of both and if we don’t, a portfolio fortification is critical.

In the likely occasion of a recession in the near future few investors cannot afford to ride this terrifying roller coaster out. A major revamp of your portfolio needs to be on the top of your financial to-do list. First off most advisors are suggesting less equities and more debt investing. We all know what that means; get out the less glamorous yet notably more secure bond list.

Here we’re going to do something a little different then what the typical investor would think of doing. Instead of investing in the usual 10 year T-bill, we are going to go the other direction. Moving about 15% of our portfolio into more profitable corporate bonds can add the necessary security needed, with about a 2-2.5% larger ROI compared to your average treasury bond. This accounts for anywhere between 10-25% of your portfolio the next step is figuring out what to do with the rest.

With a recession impending on the horizon one awful truth is imminent. Company earnings will start to contract and with earning contraction comes employment contraction. With this alarming truth comes the necessity to start preparing for an extended period of time without an income source just in case. If you feel like there is even the most remote chance of termination you will need some cash put aside that is readily accessible in times of distress.

The general norm is to have at least six months worth of living expenses set aside in an extremely liquid account. Let’s say that at the very most 10% of your portfolio should be some form of cash or any other easily accessible investment depending upon your net worth. With the safest investments out of the way lets move on to more profitable/secure investments.

We’re going to steer away from owning to many individual stocks in this volatile market so the next areas we will look into are mutual funds and ETF’s. Investing in foreign companies seems to be the most logical way to go when the US is teetering on the brink of a recession. Finding mutual funds that invest heavily in companies in China and other emerging markets have the most promise right now.

ETF’s, emerging market funds, also offer a very nice blanket of diversity. ETF’s focus investments on an entire market sector such as energy, technology, agriculture and so on. Investing anywhere from 20-30% of your portfolio in these particular vehicles will provide you with optimal security and diversity.

Recently looking more and more attractive, are what some people deem “Sin Funds/Vice Funds”. These investments focus on stocks that do particularly well historically in times of ill market conditions. Unlike most stocks during a down turn in the market, sin stocks or vice stocks, earning actually increase.It’s really a phenomenon most investors ignore.

Vice funds offer a very unique intangible asset that is impossible to duplicate in times considerably rough markets. Focusing most of their investments on companies people tend to use more of when stressed and pinched for money, such as tobacco and alcohol, makes sin funds a very safe investment. Committing up to 25% of your portfolio to a reputable sin fund could have you bragging to your friends while they are crying about how much money they’ve lost in recent weeks. As you can see individual stocks aren’t exactly the safest investments for this market, but there are some stocks that are considered as relatively safe.

If you must invest in individual stocks please take our advice and go big. Large cap stocks seem like the only way to go right now, offering little relative risk. Companies like Coca-Cola and Microsoft are looking decent right now, but don’t risk too much money on individual stock picks they’re probably not worth it in the end.

Hopefully we have provided at least a slightly enlightening way of invest your money securely in the uncertain near future. Remember with every problem comes an opportunity so keep your eyes open for companies severely undervalued. Value investing for the long term right now is your safest bet when it comes to stocks so steer clear of most growth stocks unless you know something I don’t!

Secure your portfolio and see how Sin Funds are becoming the investment choice of top Wall Street analysts and investors. Don’t take a beating from the current stock market when you can capitalize on its negative trends.

Article Source: http://EzineArticles.com/?expert=Al_Vig
http://EzineArticles.com/?Dont-Let-a-Recession-in-2008-Slow-Your-Portfolio,-Sin-Funds-and-ETFs-Save-the-Day&id=956178

Safe Investments During Volatile Market Times

By Adam Hyers

Recent significant stock market declines and portfolio volatility have many investors inquiring, once again, about the safety of annuity accounts. Consumers ask, “Are annuities safe from a recession? Do they maintain value when the market goes down? Will they lock in my gains each year?” The answer is, yes. Investing in a fixed, an immediate, or an indexed annuity policy will protect your investment from market losses.

Should You Wait Out Another Correction?

Unfortunately, many investors are suffering through similar pains to those experienced during the market slide from 1999 to 2003. Most (not all) brokerage accounts regained their losses from that period of time, but this recent downturn has quickly undone that progress.

It is business as usual from the brokers, however. They simply tell their clients to wait it out. Yet, these same brokerage houses are busy selling stocks, trying to lock in profits while their individual clients absorb the losses.

What does History Tell Us?

For many years the brokerage industry has shunned the safety of fixed annuity accounts while individual investor portfolios decline. If you look at a historical chart of the S&P 500 (a leading stock market barometer) it peaked in March of 2000 at approximately 1,500.

In October of 2007, the S&P 500 appears to have peaked again at nearly 1,500. Backing out any potential dividend gains, that is a flat rate of return for over 7 ½ years! The current value of S&P 500 (1,300 as of March 2008) shows a loss of nearly 12%.The outdated advice of buy and hold does not appear to be working.

In order to create wealth, investment portfolios need to lock in gains from time to time. An indexed annuity will lock in gains each year and protect the principal and interest gained in the account.It begs the question, why should mom and pop investors participate in this turmoil again? Do they experience a higher standard of living when the market increases? Usually not, but they certainly feel the financial pain when the market contracts by ten or twenty percent.

Maybe younger investors can weather this storm again, but there are those who cannot afford to experience significant losses. Many senior investors are in retirement and counting on their nest egg to produce regular income. Or maybe they are near retirement and trying to decide how to best protect their IRA’s, 401(k) or 403(b) accounts for future income.

Is an Annuity the Answer?

Annuity accounts are very beneficial for investors who need reliable growth, guaranteed income, and protection of their principal. Maybe the brokerage industry is winning the battle in the media, but annuity investors have been winning battle of asset preservation for the last ten years.

Annuity owners have been protecting their principal and interest while experiencing above average returns on their investment dollars.You might ask yourself, “Have I not investigated annuity accounts because of what I know, or what I think I know.” If you are not sure, it may be worth learning more. A fixed or indexed annuity account can be a valuable alternative to a volatile brokerage account.

Learn more about the benefits of fixed indexed annuity accounts

A.M. Hyers has been working in the insurance and investment industry for over ten years. He owns and operates Hyers and Associates, Inc. an independent insurance agency doing business in Georgia, Illinois, Indiana, Missouri, and Ohio.His agency offers insurance products in the individual, family, and small business group marketplace. They use the leading national insurance carriers to quote health insurance, health savings accounts, dental, and vision plans.Other lines of insurance offered include life insurance, disability insurance, and long term care insurance. They use several carriers to quote Medicare supplement plans and Medicare Part D coverage for seniors. Additionally, the independent agents of Hyers and Associates Inc. offer fixed, indexed, and immediate annuity policies for individual and group retirement plans.Insurance quotes in Georgia, Illinois, Indiana, Missouri, and OhioIndividual, Family and Group Health Insurance Quotes in Georgia, Illinois, Indiana, Missouri, and OhioArticle Source: http://EzineArticles.com/?expert=Adam_Hyershttp://EzineArticles.com/?Safe-Investments-During-Volatile-Market-Times&id=1022969

Unemployment, hunger and food shortages affected millions during the Great Depression

Between the autumn of 1931 and the following spring, the casualty lists of the Great Depression grew like those of the First World War. More that 10 million people were unemployed but only a quarter of them were receiving any relief from the government or charitable organizations. Approximately 30 million Americans were without any income at all.

Two million vagrants, many of them minors, roamed the country looking for work. 20% percent of the nation’s school children were malnourished and underweight. In the poorest communities - among the share croppers of Alabama or the coal miners of Pennsylvania, Kentucky and West Virginia, over 90 per cent were affected.

For those in work average wages fell from 1929 levels by a fifth, to $22.64, thought in Tennessee mills and New York sweatshops women were paid anything from $2.39 to $0.50 a week. Half a million Americans moved from the city to rural areas to try and make a subsistence living off the land.

During the 1930’s, for the first time in the Republic’s history, more people left the USA than arrived (although) this was partially affected by Hoover’s immigration laws). Between 1929 and 1932 the birth rate fell from 18.8 to 17.4 per 1000 and the suicide rate rose from 14 to 17.4 per 100,000.

Prices fell so low that food production was affected. In Montana thousands of acres of wheat went uncut because they would not pay for the price of harvesting - 16 bushels would earn enough to buy a 4 dollar pair of shoes. In Iowa a bushel of corn was worth less than a packet of chewing gum. Apple and peaches rotted in the orchards of Oregon and California, just as cotton did in the fields of Texas and Oklahoma.

Western ranchers killed their cattle and sheep because they could not pay to feed them.

Yet their was hunger amid abundance. Bread lines stretched under choking grain elevators. Malnutrition and associated diseases like rickets and pellagra were commonplace. President Hoover insisted that

“Nobody is actually starving”

However, Congressman George Huddleston claimed that the numbers ran into the thousands:

” I do not mean to say that they are sitting down and not getting a bite of food until they actually die, but they are living such a scrambling, precarious existence, with suffering from lack of clothing, fuel, and nourishment, until they are subject to be swept away at any time, and many are now being swept away”

Half of Chicago’s working population of 1.6 million were idle and many city employees went unpaid for long periods, including teachers.

Roosevelt’s Plan To Rebuild America

The key to challenging the Great Depression in the United States was restoring confidence. When he accepted the Democratic presidential nomination, Franklin D. Roosevelt declared,

“I pledge you, I pledge myself, to a New Deal for the American people”

The phrase New Deal caught on and came to symbolize the sweeping legislation that would be introduced in an effort to lift the country out of recession. A federally funded, federally administered program of economic relief and recovery.

In 1933 Franklin D. Roosevelt was inaugurated as president. Although he is credited with ending the Depression in America he didn’t have a clear strategy for recovery.

In the first ‘100 Hundred Days‘ of Roosevelt’s presidency, thirteen major programs were initiated to provide structure and support for recovery in banking, industry and agriculture, and to establish federal relief for the needy.

The Tennessee Valley Authority and the Civilian Conservation Corps were examples of Government projects set up to provide employment for the millions of unemployed Americans hit hard by the economic recession.

The unemployed were offered jobs in public works and farmers were paid subsidies to reduce output and raise prices.
The Federal Deposit Insurance Corporation was established to protect depositors from losing their savings in the event of another crash or banking failure.

In 1936, a system of unemployment insurance and old age pensions had been introduced. In 1938 a new law established a minimum wage and maximum working hours in a week.

The legal position of the trade unions was improved with the introduction of collective bargaining and the right of labor to form its own organizations.

These activities however did not solve all the difficulties of the Depression. The sudden economic downturn in 1937 caused Roosevelt’s liberal advisers to urge him to resume deficit spending. The economy didn’t really recover until war had broken out again in Europe in 1939 and the United States joined the rearmament boom.