Looking at the 98% probability of a recession and why our team agrees with this prediction
November 30, 2022
Welcome to Wealth Enhancement & Preservation’s Market Minute, where we get to update you on everything that happened in the financial markets this week. My name is Darrin Cohen, and I am the CEO of Wealth E&P.
It's been a great month of November so far for the markets, with all three indices up anywhere from 3% to 5%. So, the question is: do we think this will continue, or do we expect a slide back down in the bear market? First, I want to take a look at the probability of a recession. There is a lot of talk about with this, and you'll see why it's really important. Below the conference board tells us they believe there is a 98% chance of a recession over the next 12 months, which we agree with. That is really significant because when there is a bear market aligned with a recession, returns are historically much worse than when it's not aligned with the recession.
On average, bear markets go down about 26% without a recession and more than 47% when there is a recession involved. This is critical, and it is very important that you have a strategy to manage a bear market. Even though we've already felt some pain in the market, this potentially shows there could be a lot to go.
If you have any questions about this topic, your portfolio, the economy, or if you want a risk profile or a retirement projection, please feel free to reach out, visit www.wealthep.com, or give us a call at (678)-739-0175. Otherwise, stay tuned for our Market Minute next week!
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