An Overview: Economic Recessions

Economic recession is something that's re-entered?conversations with clients this year.?

So in Ireland, we had a brief recession at the start of the year,?which we have exited.?

Simply put, when a recession happens?company revenues are down?and that means their valuations reduce and?across the board, that'll mean a drop in the stock markets.

The below graph shows recessions and equity market performance - The context shows the long-term positive trend but the drops are not pleasant!

From the point of view of pension funds and investment funds,?the most influential market is the US market - It's the largest economy in the world and it's the largest stock market in the world.?

Historically speaking, stock markets drop?in the first 6 months of a recession, they rebound after that?and typically will recover well ahead of the economy.

Drop-offs can be sharp,?they can be approximately 20 to 30%, but it is temporary.?

For long-term investors,?it's something that needs to ride out the storm as such and maybe you can avail of?lower valuations if possible.

If you are a short or long-term investor and need advice or assistance on your journey, feel free to get in touch, and let's start a conversation today!