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!
|The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.|
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