Investors look beyond stocks and shares as recession fears grow

Britons are beginning to look for investment options outside of stocks and shares, as the possibility of a recession grows, according to a new study.

With concerns around stagflation – the combination of high inflation with low growth – rise, 29 per cent of respondents to a survey by private equity firm IW Capital have indicated that they are looking for new investment opportunities to achieve their financial goals.

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The highest percentage were amongst 18 to 24 year-olds, 51 per cent of which said they are looking beyond stocks and shares. Venturing beyond the traditional asset classes is the least popular amongst those older than 65, with only 12 per cent saying they are looking for new opportunities.

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“It’s particularly interesting to see that people are looking beyond the typical options of stocks and shares to things like small businesses in the UK as the threat of recession grows,” said Luke Davis, chief executive of IW Capital. “The small- and medium-sized enterprise sector is one that has shown some promising growth of late, with nearly half of UK small businesses now looking to hire new employees after a promising start to the year.”

He added that one of the reasons small and medium sized businesses are attracting investors is the potential it offers to benefit the local community directly.

Small and medium sized businesses in the UK have had impressive growth in the last year, with 56.2 per cent reporting a rise in earnings in the last quarter of the year, compared with the same period in 2020, IW Capital noted.

According to the survey, 47 per cent of respondents expect the small business sector to increase rapid growth.

Meanwhile, many Britons are searching for ways to supplement their income, potentially in response to the rising cost of living in the UK. Some 39 per cent see investing and passive income sources as an alternative to the traditional nine to five office work and 29 per cent are planning to invest in passive income sources in the next year.

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