Investors’ Newsletter – When is a recession not a recession? And does it matter?

Jul 29, 2022 | Articles, Financial Planning, Investment Management

Senior Investment Strategist Payal Trehan takes a look at short, sharp bear markets and our advice to clients in challenging times.

When is a Recession not a recession

There is a lot of recession talk around at the moment. US economic data released last month showed that the GDP retracted for the second quarter in succession, which many consider the factor that defines a recession. However, President Biden pointing to solid job growth and manufacturing rebound, declared that it ‘doesn’t sound like a recession to me.’

However, the – are we, aren’t we – word world of political semantics is a distraction from what really concerns investors – the fact that their portfolios and we are in a bear market. – I am not sure what this sentence is meant to say

Should investors be concerned?

Look at the graphic below; you can see that bear markets are short and sharp.

The average bear market since the 1960s has lasted 466 days and experienced an average fall of 38%, followed by an average bull market lasting 2,046 days and portfolio rises of 209%. The key point is not to panic, stay invested, and things always come good down the line.

In fact, a bear market is the very best time to start investing or put additional funds into the market.

I covered all these issues in detail in our second quarter review webinar. If you have not watched it yet, I recommend doing so, to have a clearer idea of how we advise clients to navigate these challenging markets.

If you are still concerned or would like to speak with Michele or me, please book a call and we can look at your personal situation and advise accordingly.

Warmest wishes,

Senior Investment Strategist
Michele Carby Practice – Holborn Assets

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