Bre-cession? How to invest through the downtimes

Economic forecasts for the UK post Brexit do not paint the rosiest of pictures, so how can you keep investing during a downturn? Even if the country does slip into recession – classed as two successive quarters of falling GDP growth – there are some companies that are listed on the London Stock Exchange (LSE) that might still be winners.

The key, if we do fall into recession, is to look for companies that make most of their money outside the UK. Investors in the FTSE 100 are lucky as the UK has long been regarded as a good place to list a company to be traded publicly, even if the company is not based here.

In fact, last year, the London Stock Exchange said more than two thirds of the revenues earned by companies listed on its FTSE 100 came from overseas. BHP, for example, is a mining company that earns 100% of its income from international markets. It produces coal, copper, iron ore and petroleum – even if the UK does stop needing quite so much of them, there are plenty of other places that do.

Despite being a favourite for UK fashionistas, Burberry actually earns most of its revenues outside the British Isles. More than 90% of its income comes from international markets – and it operates in 63 countries. So, if its customers in the UK decide to sit out a spring/summer collection next year, there are plenty of others around the world who will make up for it.

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Banking giant HSBC has a branch on most high streets and employs tens of thousands of people in the UK. But despite its huge footprint here, it earns 75% of its revenues from international markets. Its investment and business banking services are used by companies all around the globe, meaning even if British savings accounts take a dive, there are plenty of other options it can pursue.

These – and plenty of others – listed in London may rise and fall with the general market, but their overall financial integrity has little to do with the health of the UK economy. This means come what may after Brexit, they should remain relatively insulated from any slump in the country’s growth and provide somewhere for investors to hold their cash until the economy fires up again.

Check out live prices on recession-proof Brexit stocks now.

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