Are we on recession? My portfolio is super down - low cost ETF investor here

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Probably not right now. But we may be soon. Or we may not enter a recession at all.

The stock market is not the economy. It’s a measure of investor sentiment. The market decline reflects rising interest rates requiring a higher risk premium from equities and the prospect of recession. A down market doesn’t mean we are in a recession.

likesmart

Yes. The reason everybody is unsure is because we usually call it a recession if there are two consecutive negative GDP prints. Since it was an election year, that term was redefined. So no major outlets reported on it.

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Yield curve is the most accurate recession indicator we have but even yield curve inverting doesn’t guarantee we will enter a recession.

I do think there is a good chance we go into recession, but to act like it’s a foregone conclusion because of an indicator isn’t correct. It misses that the yield curve has inverted before all recent recessions, but it’s inverted at other times of economic uncertainty when we didn’t enter recession too.

smart

Yes, just keep investing and don’t worry too much

If we got out of 2008, we will get out of this one

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Yup!

Kinda. I’d be unsurprised if it gets much worse, though. The high rates are intended to drive up unemployment. On top of many other layoffs happening, we’re going to see lots of people struggling, which could overcorrect demand and depress us much more than intended. By 2024, that could result in another stimulus. The question will be one of of who is in charge, and whether it goes to individuals or to businesses.

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