Stock Performance In A Recession
It’s now been more than five years since our last recession. This most recent recession, caused by the financial crisis, officially began in December 2007 and lasted until June 2009, a period of 18 months. It was the longest of 12 recessions, identified as such by the National Bureau of Economic Research, occurring in the post-World War II era.
During that period, the average length of a recession was 11 months. The longest we have gone between recessions was from March 1991 (that recession began in July 1990 and lasted eight months) until March 2001 (a recession that also lasted eight months and ended in November 2001).
A topic of great interest to investors is how stocks tend to perform in recessions. Before answering that question, however, it’s important to note that we often don’t know when a recession officially has begun until much later, and when it has ended until well after it’s over.
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