A Recession's Impact Is All in the Timing
[R]ecent history shows that it’s often the anticipation of a recession that depresses stock prices, not the actual experience of a recession. So if we’re out of the anticipatory stage, stocks could soon start to stabilize.
Sam Stovall, chief investment strategist at S.& P., studied the performance of the stock market during the last 11 recessions, as defined by the National Bureau of Economic Research, going back to 1945. He found that the S.& P. 500 fell 26 percent, on average, from the months leading up to a recession to the recession lows.
Yet Mr. Stovall’s analysis also showed that between the official starting and ending dates of those recessions, the S.& P. held relatively steady, gaining 0.1 percent, on average.
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Sam Stovall, chief investment strategist at S.& P., studied the performance of the stock market during the last 11 recessions, as defined by the National Bureau of Economic Research, going back to 1945. He found that the S.& P. 500 fell 26 percent, on average, from the months leading up to a recession to the recession lows.
Yet Mr. Stovall’s analysis also showed that between the official starting and ending dates of those recessions, the S.& P. held relatively steady, gaining 0.1 percent, on average.