Calling for a recession has recently become a “thing” for many Wall Street pundits. But after 10 years of unending U.S. economic growth, and currently fading global growth, that declaration does not qualify any of us for the investment strategy Hall of Fame. However, if any of us who have been pleading with our audiences to pay attention to what is happening stop doing so now, that would clearly place us in the “Hall of Shame.”
So, without fanfare, here is a straightforward look at what is going on, and why the coming recession itself is NOT the issue for you. It is how you prepare for it. Because if you do, you actually have a chance to profit from it.
Evidence is piling up that the U.S. is heading for a slowdown. And as I have written to you frequently, that in itself is not as important as what investors as a whole (“the market”) do with that information. We could technically avoid a textbook recession, defined as 2 consecutive quarters of negative economic growth), but if the markets react to the rumor and not the news, so to speak, the result to you is the same: generally lower stock prices and a potential shock to the bond market.
I looked back at what I have written about the growing number of threats to wealth over the past couple of years, and in particular an article I wrote for Forbes.com back in January 2018 highlights some of what I then called “lingering threats to investor wealth.” This was just before I formally changed our Investment Climate Indicator to “Stormy,” where it has remained for over 14 months.
It will come as no surprise to you, based on what you read above, that exactly none of these have been resolved yet. They are still lingering.
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