Treasury Bond Market Signals High Odds of Looming Recession, But History Says Stay Invested for the Long Run
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The US Treasury bond market has inverted before every recession since 1969, implying a high chance of an impending recession.
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The current inversion is the most severe since 1981, implying an unprecedentedly high recession probability.
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Recessions typically bring stock market crashes, with the S&P 500 falling 31% on average during past recessions.
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However, stocks rebound sharply before recessions end, so trying to time the market is unwise.
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Despite impending recessions, stocks have returned 10% annually over the past 30 years, so long-term investors should stay invested.