Publicado en finanzas

Selling Everything (How To Invest In A Recession)

The 2022 recession and what you need to know.

IS THERE GOING TO BE A RECESSION IN 2022?

Every time we had a spike in inflation above 5% – it was followed by a recession other than 1 time in the last 70 years.

WHAT IS A RECESSION?

A recession is technically defined as 6 months – or two back to back quarters of negative growth.

HOW DO WE MEASURE GROWTH?

Growth is measured by the GDP – the gross domestic product which you can also find here: https://fred.stlouisfed.org/series/GDP, you can see the most recent recession – started in Q1 of 2020, there was a dip in growth, and then a huge dip in GDP in Q2 of 2020 which officially made it a recession.

WILL THERE BE AN ACTUAL RECESSION?

Check this out: https://fred.stlouisfed.org/series/CP… going back as far as the 1950s, anytime we’ve had an inflation reading above 5%, we got a recession which are those grey columns in chart above.

WHAT IS INFLATION NOW?

Inflation is nearing 7% right now which means based on historical evidence, there’s a good chance we’ll get two consecutive quarters of negative GDP growth.

HOW DOES THE STOCK MARKET DO IN A RECESSION?

That’s the real question! We’ve had 30 recessions between 1869 and 2018. Now of those 30, 16 recessions have had a positive stock market return from when they started – to when they finished.

The positive stock market recessions lasted on average – 16 months and stocks ranged a return between 0.7% to 38.1% with an average return of 9.8% despite the fact that the GDP declined on average 3%.

HOW IS THAT POSSIBLE?

They found the correlation between recessions as measured by the GDP growth and the stock-market at nearly -0.05. So it’s almost 0 correlation between a recession and the stock market. The 14 recessions when the stock market went down, lasted 18 months on average, with an average return of -14.2%.

SHOULD I SELL ALL MY STOCKS?

In order to beat a buy-and-hold return of 9.0% over the last 150 years, an investor would have to successfully predict 77% of the market turns —and move in and out of stocks/cash as appropriate (Russell Investments: https://russellinvestments.com/us/blo…).

Even if you knew for sure when a recession was coming, the odds of losing or making money is about 50/50.

History says it’s nearly impossible to time the market.

Autor:

Soy un Amante de los Negocios. Me gusta Ayudar al Projimo. Admiro mucho a las Personas Perseverantes que no se rinden ante las Adversidades y que les motiva Superarse para dar lo Mejor de si mismo. Busco constantemente la Sabiduria en la Palabra de Dios. Odio las Injusticias. Los discrimines. El abuso de poder. Deseo aportar Grandes Ideas a la Humanidad. Dar lo mejor de mi. Es mi anhelo vivir en un mundo de paz , amor y felicidad. Sin odios, guerras u egoísmos. Que el Mundo y el Universo que Compartimos sea mucho Mejor de lo que es. Proteger nuestro medio ambiente. Me gusta contemplar la Naturaleza. Disfrutar las cosas simples, como las Sonrisas de los niños, la Alegria de los enamorados y el Gozo del Alma cuando estamos verdaderamente felices. Deseo Compartir lo Mejor de mi y que juntos seamos grandes Amigos. Enlazando Nuestros Conocimientos. Realizar Grandes Negocios.Pero sobre todas las Cosas dar Gracias por todas las Cosas Buenas que hemos recibido. ¡Puedes Contar Conmigo Siempre! Dios te Bendiga Abundantemente en este dia! Tu Amigo, Marvin Gandis

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