It is almost certain we are in a recession at this point. Many analysts believed the possibility of going into recession in 2020 was fairly high at the beginning of the year, but nobody expected an almost total shutdown of the world economy in response to a pandemic. Talk about a black swan!
The standard definition of a recession is two quarters of economic contraction. So we won’t get official word on this from authorities until sometime in the summer. We believe we are already there. But we also believe that markets may have already priced in most of the effects of a self-induced recession. Remember that markets always look forward by at least several months. We can’t say for sure we’ll be out of it quickly. The virus has to run its course and the scientific and medical communities are obviously working overtime to find treatment and prevention via vaccination for Covid-19. We can’t know quite yet how that will turn out but we are confident that positive results are not too far off. And the data on new cases is definitely starting to turn thanks to social distancing.
So what should you do with your investments? As last week’s blog pointed out, having a plan and sticking to it is key. Capital Group, known by many as American Funds, has a great post out today on recessions and the economy. Take a look:
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 guarantee of future results. All indices are unmanaged and may not be invested into directly.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
The fast price swings in commodities and currencies will result in significant volatility in an investors holding.
Capital Group, American Funds, EverVest Financial and Stratos Wealth Partners are not affiliated with LPL financial.