UK Citizens Urged to Protect Their Portfolios in 2010

The growing national debt of Britain is causing major concern, both at home and abroad as more experts continue to point out the fact that the government is playing a dicey game with debt. While gilts (government debt) have been the traditional means of bailing the country out in the past, today it appears that veteran investors are turning their backs on such investments, potentially causing the government to veer towards even greater troubles than the already colossal £178 billion deficit that the UK faces.

Since gilts are a primary fundraising tool, it could imply severe future damage to the economy should investors remain sceptical of their viability as solid investments. This would push the gilts towards lower prices and higher yields, not a positive thing for the economy. Since ratings agencies may downgrade the British economy in coming months, investors remain especially flighty and prone to placing their money elsewhere. This could lead to further dips in the stock market, unsettling a national economy already teetering at a precarious balance.

Since this economic dip could affect bonds, stocks and even property investments, analysts are advising extreme caution. With so many in debt trouble already, the number of people seeking debt management programmes is on the rise and those entering into an IVA are expected to be joining a very crowded list of people who are quite understandably struggling in the current economy.

Protecting one’s assets is proving to be a critical step to guard against a rough 2010, particularly the first half of the year when the economy will see a serious post holiday drop. Sterling, despite it’s nearly 10 percent rise in 2009 is expected to slip so if investors wait they are likely to find good buying opportunities. Shares remain unstable, but investing experts suggest that investments are best made at the beginning of the year rather than waiting since the last half of 2010 is foreseen to be something of a downward progression for stocks. Housing and property prices should also be sliding, so if investors wait, they will be able to spring upon solid bargains towards the middle of the coming year.