jepittman

How Long Will the Recession Last and How Will the Market Perform?

The chances the recession continues for another three to six months look pretty good. Beyond that looks increasingly unlikely. The last chart shows equity returns averaging 25% from the trough to the end of the recession. If this is anything even remotely close to the average recession (even allowing it to be worse than average) then it appears we are very close to a bottom in the equity markets - slightly after or slightly before the lows. Regardless of the ultimate fact (we will not know for sure until much later), It appears to me the above charts argue for positions in quality stocks and ETFs to be accumulated. There will be no bell rung at the bottom and with today's wild volatility stocks can be up huge in minutes or hours. The recession will end and when it does the market will already be much higher.