Recession Odds Rise, But History Shows Patience Pays for Long-Term Stock Investors
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The New York Fed's recession forecasting tool implies a 46% chance of recession in the next 12 months. Historically this tool has predicted recessions accurately when the probability exceeds 32%.
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Recessions often precede stock market declines. Around 2/3 of S&P 500 drawdowns have occurred after recessions were declared.
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Other indicators like yield curve inversions also warn of potential economic trouble ahead.
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However, long-term, stocks tend to reward patience. Bull markets last 3-4 times longer than bear markets historically.
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The longest bull markets have lasted longer than even the longest bear market. Remaining optimistic long-term has an unmatched success rate.