The inevitable economic downturn brought about by the Coronavirus crisis is going to put a lot of businesses in danger. But for those that recover, there are strategies you can implement to protect yourself from future damages.
One of the things you can do if your pension fund is stock market based is to tilt it more heavily towards bonds. The typical values for a middle-aged person with a stock exchange pension fund is about 60% shares and 40% bonds. If the outlook is dire, consider tilting these percentages towards bonds or cash. Just remember to shift them back in favour of stocks and equities once the market looks more promising, to avoid missing out on sudden market movements.
A buffer is one of the most important things any business can have in the event of a financial crisis, so if you have not started building one already, this should be a priority. A cash reserve, covering 3-6 months expenses, wards against running out of funds in the event of an unexpected issue. Combine with this a clear budget and minimised outgoings as much as possible, and you put yourself in a much more sustainable position.
Spreading your money around is another good strategy. The first £85,000 held with an individual financial institution is backed by the government. But some banks are members of the same institution, like Lloyds and Halifax for example. This means that if you have £85,000 with these two banks, you only have one guarantee, as they are part of the same organisation. Spreading savings around, therefore, is a vital way of protecting them.
There are numerous strategies you can employ to protect yourself and your business as far as possible in the face of an economic crisis. This is by no means an exhaustive list, but the techniques in this blog can go some way to prepare you for if the worst should happen.