Worried about a recession? Patient investors can ride it out

On November 20, 2008 in the middle of the financial crisis, a trader is seen on the floor at the New York Stock Exchange. It was a difficult time for the stock exchange. Sat, 29 Apr 2023 at 8:19 PM

The Federal Reserve has raised interest rates to combat inflation for over a year. The credit conditions are already tightening and certain regional banks have collapsed. This is particularly worrying for investors, because stock market declines of double digits are usually associated with recessions. Will there be a real recession this year? I don't really know. Recessions are part of everyday life. It's hard to hold on. Investing can be a painful experience if you're uncertain about the future. Stocks always recovered after recessions in the past, and sometimes very quickly. It sounds simple enough. We won't be able to tell for certain if we have had a recession, until it has started and most likely, until it is over. This is what happened with the last recession. The last recession began in February 2020 near the start of the pandemic and ended in April. The bureau states that 'previous determinations took four to 21 months'. There is no set timing rule. Marlena Le, global head of Investment Solutions at Dimensional Fund Advisors said that the economic research bureau "dates recessions after they have begun." Annualized, the best return for 20 years, starting February 1980, was 17.2%. The worst return over a 20-year period, starting May 1960, was 7.3% annually. The original version of this article appeared in The New York Times.