Latest news with #post-WWII
Express Tribune
3 days ago
- Business
- Express Tribune
From Russia, with Love
As the West-led, post-WWII global order undergoes a major transformation amidst turbulence and volatility, the building blocks of an alternative worldview are evident in Pakistan's vicinity. Recent journeys to Beijing and Moscow have confirmed the contours of a huge transition, driven by decline of the West and rise of the East. As President Xi Jinping famously told President Vladimir Putin during a visit to Moscow on March 22, 2023, "Right now, there are changes, the likes of which we haven't seen for 100 years, and we are the ones driving these changes together." These changes refer to the tectonic shifts in the global balance of economic, political, military, scientific and technological power, from the West to the East, shifts which are inexorable and irreversible. In this context, Pakistan's military, political and diplomatic victory over India in last month's 16 hours of eyeball-to-eyeball confrontation is also having ramifications that go beyond the region, changing the South Asian geopolitical landscape. Perceptions of India and Pakistan, in the eyes of allies and adversaries, have been altered. The big picture presents an outlook that has pluses for Pakistan, providing Pakistan with strategic space, in an altered geopolitical landscape. Three new realities in terms of relationships among four key regional powers - China, Russia, Pakistan and India - are clearly evident. First, the China-Russia alliance is rock-solid, cemented by their adversaries attempts to ignite a new Cold War, as well as Trump's failed trade and tariff war. Both Beijing and Moscow are of the view that the Western world, centred on the EuroAtlantic, with NATO as its military arm, is determined to 'contain' both of these giants, in Asia and Europe respectively. Hence, the possibility of a 'Reverse Nixon' is non-existent. 'Reverse Nixon' is the naive notion peddled by some in the Washington Establishment, who felt that just as President Nixon, in the 1970s, had delinked China from the Soviet Union to form a Sino-US alliance that ultimately proved decisive in the defeat of the Soviet Union, a similar manoeuvre now by the US to delink Russia from China could jointly pressure China. Both China and Russia are now deeply committed to jointly building Eurasia as the global strategic centre for both geopolitics and geoeconomics. Second, the Pak-China strategic partnership has been solidified in the recent struggle in a new qualitative manner, as rock solid as the China-Russia relationship. Reinforcing this is the fact that Moscow no longer views Pakistan through Indian lenses, and there's a new-found respect and liking for Pakistan in the Russian political establishment. Russia is now ready to build a closer rapport with Pakistan, an outreach in which Russian disillusionment with India is also a factor. Third, after meeting Russia's highly experienced Foreign Minister, Sergey Lavrov, and listening to his landmark 29 May speech at the Eurasian Forum in Perm, Russia, where, for the first time, he criticised India's role in the Western sponsored military arrangements like the Indo-Pacific Strategy and QUAD, in front of an audience that included a dozen BJP parliamentarians and party activists, shows that the first cracks have appeared in the bond between Delhi and Moscow. Trump's India-specific embarrassing statements (calling for reviving the Kashmir dispute and rehyphenating Pakistan with India), Pakistan's May 10 victory over India and China's May 14 announcement of giving Indian-occupied Arunachal Pradesh a new Chinese name, Zangnan have added to India's isolation and discomfiture. The Big Three - US, China and Russia - are now collectively equidistant from India. The narrow-based, insular, divisive Hindutva regime in Delhi offers limited appeal to the Big Three, more so, since its arrogance and hubris were decisively punctured by Pakistan's demolition of the 'Shining India' military myth in May. No wonder it is Whining India now, carrying on a chorus of cribbing and complaining about Pakistan in world capitals. A key change in the Russia-India relations is that, irrespective of the regime ruling New Delhi, Russia also had a deep ingress in the Indian political establishment. Now with a weakened Left in India, almost a non-relationship of Moscow with the Congress Party and Kremlin's discomfiture with the ruling BJP's deep-seated pro-Americanism, Russia's political bond with India has weakened. Russia has prioritised ties with China and is willing to seek greener pastures in South Asia with a more confident and reliable Pakistan. Meanwhile, Lavrov's speech at the Eurasian Forum on May 29 had three key planks: 1) Building new security architecture in the Eurasian continent (largest and wealthiest) is necessary given 'approaching end of centuries-long Western dominance and advent of multipolar era', with Eurasia replacing EuroAtlantic as the center of gravity in global affairs. 2) Within Eurasia, the centerpiece is where the region's four nuclear powers - China, Russia, Pakistan and India - are located, with Indian participation in the Western military schemes like Indo-Pacific Strategy and QUAD causing discomfiture to both Beijing and Moscow. 3) "Four years after its ignominious retreat from Afghanistan, NATO is once again seeking new points of entry into Afghanistan." However, the most telling of Lavrov's remarks was his unvarnished critique of India's participation in QUAD, as during preliminary discussions with the Russians, India "emphasised that their intent was confined exclusively to trade, economic and other peaceful domains of collaboration". But to the surprise of Russia, India did the opposite of what they promised to Russia: "in practice, however, the QUAD nations (India, US, Japan and Australia) are already endeavouring, with notable persistence, to organise naval (military) exercises!" In another first, Lavrov specifically attacked the Indo-Pacific Strategy, linking it directly to India's role, saying that such a nomenclature "had never existed and NATO made it up to drag India into their anti-China schemes". In other words, India is being viewed in Moscow as a willing accomplice of and collaborator in the West's anti-China games, which are synonymous with anti-Russia policies. Given this context, Pakistan has strategic space and a unique opportunity to outflank India in the heart of Eurasia. With better ties now emerging with Iran and Afghanistan, a solid and stable relationship with China and a sympathetic perspective from Moscow, plus an assertive South Asia that has rejected Indian hegemony, Pakistan should consolidate its gains, with a healing touch at home and a region-centric foreign policy that leverages its role, relationships and respect into strategic dividends for the country. These developments provide an opportunity for a strategic reset in foreign policy: with Russia; with our Western neighbours like Iran and Afghanistan; and with the smaller states of South Asia. The last such opportunity that arose for a strategic reset with Russia was after the breakup of the Soviet Union in 1991, but it was squandered due to the flawed obsession with 'strategic depth' in Afghanistan. Let it not be said "we never miss an opportunity to miss an opportunity."
Yahoo
7 days ago
- Business
- Yahoo
You won't know when a recession starts: 5 key facts about downturns
The looming threat of recession has hung over American consumers for what seems like forever, an ongoing economic drama that stretches back to the early pandemic years. The chances of a recession in 2025 currently stand at about 40%, according to a May 27 report from J.P. Morgan. A month ago, many forecasters put the odds higher than 50%. If a recession comes, how will we know? When will it end? What will be the fallout on Wall Street? Here are some answers, drawn from experts at Investopedia, Motley Fool, Fidelity, NerdWallet and other sources. Economic downturns might seem to last forever: Endless months of corporate layoffs, shaky stock prices and general financial malaise. Yet, going back to the Civil War era, the average recession has lasted only about 17 months. Since World War II, the typical recession has lasted about 10 months. 'The reason they've been getting shorter is that policymakers and the Federal Reserve and the Treasury have been getting more creative about how to deal with them,' said Caleb Silver, editor in chief of Investopedia. 'That could mean flooring interest rates. That could mean stimulating the economy by giving stimulus payments to households.' Recessions feel interminable because of their impact on the job market, stock market and household budgets. The actual downturn might end in 10 months, but it 'may take us longer to bounce back,' said Niv Persaud, a certified financial planner in Atlanta. Recessions are part of America's boom and bust cycle. And here's the good news: Boom times tend to be longer. In the post-WWII era, the average economic expansion has lasted for nearly five years. The National Bureau of Economic Research defines a recession as 'a significant decline in economic activity spread across the economy, lasting more than a few months.' By that definition, a recession isn't a recession until the downturn has persisted for at least a few months. Theoretically, we could be in a recession right now. 'You don't usually find out that you're in a recession until six months after you've been in one,' said Denise Chisholm, director of quantitative market strategy at Fidelity. The economic bureau decides when a recession has started, Fidelity reports, measuring signs of sustained decline in purchasing power, employment data, industrial production, retail sales and gross domestic product, among other factors. Typically, those metrics must fall for several months before the economic bureau invokes the "R" word. But not always: The COVID-19 recession of 2020 lasted only two months. How convenient it would be for wary investors, searching for clues to the market's direction, if stock prices began marching steadily down on the day the economists announced a recession. But the market doesn't work that way. 'The stock market is a leading indicator,' said Robert Brokamp, a senior adviser at The Motley Fool. The market anticipates economic trends, including recessions, months before they arrive. 'It starts to go down, generally speaking, six months before a recession,' Brokamp said. 'And it starts to recover six months before the recession is over, very broadly speaking.' When you consider that we don't know a recession is happening until months after it starts, you begin to understand how hard it can be to make investment decisions in a recession. 'Stocks usually bottom out about halfway through,' said Chisholm of Fidelity. 'So, by the time you have learned you are in a recession, stocks, more often than not, have bottomed.' The stock market and economy don't move in lockstep. Sometimes they seem to move in opposite directions. 'If we go into a recession,' said Silver of Investopedia, 'you might notice that the stock market didn't dip that much at all.' However much investors might fret about the stock market in a downturn, history suggests the market will eventually recover. The S&P 500 took back all of its losses in the Great Recession of 2008, although not until 2013. If you're retired and spending down your savings, then a recession can bring fiscal disaster. For just about anyone else, there's time to rebound. The bigger danger, said Brokamp of Motley Fool, is losing your job. Unemployment hit 10% in the Great Recession, the jobless rate peaking after the actual recession was over. Unemployment reached 14.7% in the brief COVID-19 downturn. People lose jobs in recessions because companies are making fewer goods and selling fewer services, and thus, they need fewer employees. 'If you're still working, and you're not close to retirement, the big issue is job security,' Brokamp said. To buy low and sell high is a mantra of investing. But timing those transactions can be tricky. When to sell stocks is a particularly tough call, for the simple reason that stock prices tend to rise. You could sell your stocks on a day when the S&P 500 hits a record high, only to wake up the next day and watch the market climb higher. Cashing out of the stock market in a recession is generally a mistake, experts say, because of the market's notorious volatility. It's hard to predict when stock prices will slide, how low they will go, or when they will recover. 'Selling stocks to try to protect your portfolio from a recession is going to be an almost impossible enterprise,' said Sam Taube, a lead investing writer at NerdWallet. But buying stocks in a recession, experts say, can be a comparatively safe move. The 'buy low' directive instructs that investors should purchase stocks when the market is down. In a downturn, stock indexes can fall 10% or 20% (or more) below their historic highs. Buying stocks at those times is a relatively easy call. 'History has shown us that the stock market recovers,' said Brokamp of Motley Fool. 'So, if you have the opportunity to buy stocks at a discount, you'll always be happy you did it.' Remember, though, that months or years might pass before the stock market recovers completely from a recessionary swoon. Buying stocks in a downturn makes the most sense for investors who won't need the money for the holidays. This article originally appeared on USA TODAY: 5 facts about economic recessions: You won't know when one's coming
CNBC
7 days ago
- Business
- CNBC
This is why Jamie Dimon is so gloomy on the economy
The more Jamie Dimon worries, the better his bank seems to do. As JPMorgan Chase has grown larger, more profitable and increasingly more crucial to the U.S. economy in recent years, its star CEO has grown more vocal about what could go wrong — all while things keep going right for his bank. In the best of times and in the worst of times, Dimon's public outlook is grim. Whether it's his 2022 forecast for a "hurricane" hitting the U.S. economy, his concerns over the fraying post-WWII world order or his caution about America getting hit by a one-two punch of recession and inflation, Dimon seems to lace every earnings report, TV appearance and investor event with another dire warning. "His track record of leading the bank is incredible," said Ben Mackovak, a board member of four banks and investor through his firm Strategic Value Bank Partner. "His track record of making economic-calamity predictions, not as good." Over his two decades running JPMorgan, Dimon, 69, has helped build a financial institution unlike any the world has seen. A sprawling giant in both Main Street banking and Wall Street high finance, Dimon's bank is, in his own words, an end-game winner when it comes to money. It has more branches, deposits and online users than any peer and is a leading credit card and small business franchise. It has a top market share in both trading and investment banking, and more than $10 trillion moves over its global payment rails daily. A review of 20 years of Dimon's annual investor letters and his public statements show a distinct evolution. He became CEO in 2006, and his first decade at the helm of JPMorgan was consumed by the U.S. housing bubble, the 2008 financial crisis and its long aftermath, including the acquisition of two failed rivals, Bear Stearns and Washington Mutual. By the time he began his second decade leading JPMorgan, however, just as the legal hangover from the mortgage crisis began to fade, Dimon began seeing new storm clouds on the horizon. "There will be another crisis," he wrote in his April 2015 CEO letter, musing on potential triggers and pointing out that recent gyrations in U.S. debt were a "warning shot" for markets. That passage marked the start of more frequent financial warnings from Dimon, including worries of a recession — which didn't happen until the 2020 pandemic triggered a two-month contraction — as well as concerns around market meltdowns and the ballooning U.S. deficit. But it also marked a decade in which JPMorgan's performance began lapping rivals. After leveling out at roughly $20 billion in annual profit for a few years, the sprawling machine that Dimon oversaw began to truly hit its stride. JPMorgan generated six years of record profit from 2015 to 2024, twice as many record hauls as in Dimon's first decade as CEO. JPMorgan is now the world's most valuable publicly traded financial firm and is spending $18 billion annually on technology, including artificial intelligence, to stay that way. While Dimon seems perpetually worried about the economy and rising geopolitical turmoil, the U.S. economy keeps chugging along. That means unemployment and consumer spending has been more resilient than expected, allowing JPMorgan to make record profits. In 2022, Dimon told a roomful of professional investors to prepare for an economic storm: "Right now, it's kind of sunny, things are doing fine, everyone thinks the Fed can handle this," Dimon said, referring to the Federal Reserve managing the post-pandemic economy. "That hurricane is right out there, down the road, coming our way," he said. "This may be the most dangerous time the world has seen in decades," Dimon said the following year in an earnings release. But investors who listened to Dimon and made their portfolios more conservative would've missed on the best two-year run for the S&P 500 in decades. "It's an interesting contradiction, no doubt," Mackovak said about Dimon's downbeat remarks and his bank's performance. "Part of it could just be the brand-building of Jamie Dimon," the investor said. "Or having a win-win narrative where if something goes bad, you can say, 'Oh, I called it,' and if doesn't, well your bank's still chugging along." According to the former president of a top five U.S. financial institution, bankers know that it's wiser to broadcast caution than optimism. Former Citigroup CEO Chuck Prince, for example, is best known for his ill-fated comment in 2007 about the mortgage business that "as long as the music is playing, you've got to get up and dance." "One learns that there's a lot more downside to your reputation if you are overly optimistic and things go wrong," said this former executive, who asked to remain anonymous to discuss Dimon. "It's damaging to your bank, and you look stupid, whereas the other way around, you just look like you're being a very cautious, thoughtful banker." Banking is ultimately a business of calculated risks, and its CEOs have to be attuned to the downside, to the possibility that they don't get repaid on their loans, said banking analyst Mike Mayo of Wells Fargo. "It's the old cliché that a good banker carries an umbrella when sun is shining; they're always looking around the corner, always aware of what could go wrong," Mayo said. But other longtime Dimon watchers see something else. Dimon has an "ulterior motive" for his public comments, according to Portales Partners analyst Charles Peabody. "I think this rhetoric is to keep his management team focused on future risks, whether they happen or not," Peabody said. "With a high-performing, high-growth franchise, he's trying to prevent them from becoming complacent, so I think he's ingrained in their culture a constant war room-type atmosphere." Dimon has no shortage of things to worry about, despite the fact that his bank generated a record $58.5 billion in profit last year. Conflicts in Ukraine and Gaza rage on, the U.S. national debt grows and President Donald Trump's trade policies continue to jolt adversaries and allies alike. "It's fair to observe that he's not omniscient and not everything he says comes true," said Truist bank analyst Brian Foran. "He comes at it more from a perspective that you need to be prepared for X, as opposed to we're convinced X is going to happen." JPMorgan was better positioned for higher interest rates than most of its peers were in 2023, when rates surged and punished those who held low-yielding long-term bonds, Foran noted. "For many years, he said 'Be prepared for the 10 year at 5%, and we all thought he was crazy, because it was like 1% at the time," Foran said. "Turns out that being prepared was not a bad thing." Perhaps the best explanation for Dimon's dour outlook is that, no matter how big and powerful JPMorgan is, financial companies can be fragile. The history of finance is one of the rise and fall of institutions, sometimes when managers become complacent or greedy. In fact, the graveyard of bank logos that are no longer used includes three — Bear Stearns, Washington Mutual and First Republic — that have been subsumed by JPMorgan. During his bank's investor day meeting this month, Dimon pointed out that, in the past decade, JPMorgan has been one of the only firms to earn annual returns of more than 17%. "If you go back to the 10 years before that, OK, a lot of people earned over 17%," Dimon said. "Almost every single one went bankrupt. Hear what I just said? "Almost every single major financial company in the world almost didn't make it," he said. "It's a rough world out there."
USA Today
29-05-2025
- Business
- USA Today
You won't know when a recession starts: 5 key facts about downturns
You won't know when a recession starts: 5 key facts about downturns Show Caption Hide Caption What we know: How savings could protect your family in a recession This is the strategy and amount of savings that protect your family in a recession. Here's what we know now. The looming threat of recession has hung over American consumers for what seems like forever, an ongoing economic drama that stretches back to the early pandemic years. The chances of a recession in 2025 currently stand at about 40%, according to a May 27 report from J.P. Morgan. A month ago, many forecasters put the odds higher than 50%. If a recession comes, how will we know? When will it end? What will be the fallout on Wall Street? Here are some answers, drawn from experts at Investopedia, Motley Fool, Fidelity, NerdWallet and other sources. Recessions are shorter than they seem Economic downturns might seem to last forever: Endless months of corporate layoffs, shaky stock prices and general financial malaise. Yet, going back to the Civil War era, the average recession has lasted only about 17 months. Since World War II, the typical recession has lasted about 10 months. 'The reason they've been getting shorter is that policymakers and the Federal Reserve and the Treasury have been getting more creative about how to deal with them,' said Caleb Silver, editor in chief of Investopedia. 'That could mean flooring interest rates. That could mean stimulating the economy by giving stimulus payments to households.' Recessions feel interminable because of their impact on the job market, stock market and household budgets. The actual downturn might end in 10 months, but it 'may take us longer to bounce back,' said Niv Persaud, a certified financial planner in Atlanta. Recessions are part of America's boom and bust cycle. And here's the good news: Boom times tend to be longer. In the post-WWII era, the average economic expansion has lasted for nearly five years. You won't know when a recession starts The National Bureau of Economic Research defines a recession as 'a significant decline in economic activity spread across the economy, lasting more than a few months.' By that definition, a recession isn't a recession until the downturn has persisted for at least a few months. Theoretically, we could be in a recession right now. 'You don't usually find out that you're in a recession until six months after you've been in one,' said Denise Chisholm, director of quantitative market strategy at Fidelity. The economic bureau decides when a recession has started, Fidelity reports, measuring signs of sustained decline in purchasing power, employment data, industrial production, retail sales and gross domestic product, among other factors. Typically, those metrics must fall for several months before the economic bureau invokes the "R" word. But not always: The COVID-19 recession of 2020 lasted only two months. In a recession, stocks don't always go down How convenient it would be for wary investors, searching for clues to the market's direction, if stock prices began marching steadily down on the day the economists announced a recession. But the market doesn't work that way. 'The stock market is a leading indicator,' said Robert Brokamp, a senior adviser at The Motley Fool. The market anticipates economic trends, including recessions, months before they arrive. 'It starts to go down, generally speaking, six months before a recession,' Brokamp said. 'And it starts to recover six months before the recession is over, very broadly speaking.' When you consider that we don't know a recession is happening until months after it starts, you begin to understand how hard it can be to make investment decisions in a recession. 'Stocks usually bottom out about halfway through,' said Chisholm of Fidelity. 'So, by the time you have learned you are in a recession, stocks, more often than not, have bottomed.' The stock market and economy don't move in lockstep. Sometimes they seem to move in opposite directions. 'If we go into a recession,' said Silver of Investopedia, 'you might notice that the stock market didn't dip that much at all.' The big danger in a recession is losing your job However much investors might fret about the stock market in a downturn, history suggests the market will eventually recover. The S&P 500 took back all of its losses in the Great Recession of 2008, although not until 2013. If you're retired and spending down your savings, then a recession can bring fiscal disaster. For just about anyone else, there's time to rebound. The bigger danger, said Brokamp of Motley Fool, is losing your job. Unemployment hit 10% in the Great Recession, the jobless rate peaking after the actual recession was over. Unemployment reached 14.7% in the brief COVID-19 downturn. People lose jobs in recessions because companies are making fewer goods and selling fewer services, and thus, they need fewer employees. 'If you're still working, and you're not close to retirement, the big issue is job security,' Brokamp said. A recession is a great time to buy stocks To buy low and sell high is a mantra of investing. But timing those transactions can be tricky. When to sell stocks is a particularly tough call, for the simple reason that stock prices tend to rise. You could sell your stocks on a day when the S&P 500 hits a record high, only to wake up the next day and watch the market climb higher. Cashing out of the stock market in a recession is generally a mistake, experts say, because of the market's notorious volatility. It's hard to predict when stock prices will slide, how low they will go, or when they will recover. 'Selling stocks to try to protect your portfolio from a recession is going to be an almost impossible enterprise,' said Sam Taube, a lead investing writer at NerdWallet. But buying stocks in a recession, experts say, can be a comparatively safe move. The 'buy low' directive instructs that investors should purchase stocks when the market is down. In a downturn, stock indexes can fall 10% or 20% (or more) below their historic highs. Buying stocks at those times is a relatively easy call. 'History has shown us that the stock market recovers,' said Brokamp of Motley Fool. 'So, if you have the opportunity to buy stocks at a discount, you'll always be happy you did it.' Remember, though, that months or years might pass before the stock market recovers completely from a recessionary swoon. Buying stocks in a downturn makes the most sense for investors who won't need the money for the holidays.
Yahoo
29-05-2025
- Business
- Yahoo
You won't know when a recession starts: 5 key facts about downturns
The looming threat of recession has hung over American consumers for what seems like forever, an ongoing economic drama that stretches back to the early pandemic years. The chances of a recession in 2025 currently stand at about 40%, according to a May 27 report from J.P. Morgan. A month ago, many forecasters put the odds higher than 50%. If a recession comes, how will we know? When will it end? What will be the fallout on Wall Street? Here are some answers, drawn from experts at Investopedia, Motley Fool, Fidelity, NerdWallet and other sources. Economic downturns might seem to last forever: Endless months of corporate layoffs, shaky stock prices and general financial malaise. Yet, going back to the Civil War era, the average recession has lasted only about 17 months. Since World War II, the typical recession has lasted about 10 months. 'The reason they've been getting shorter is that policymakers and the Federal Reserve and the Treasury have been getting more creative about how to deal with them,' said Caleb Silver, editor in chief of Investopedia. 'That could mean flooring interest rates. That could mean stimulating the economy by giving stimulus payments to households.' Recessions feel interminable because of their impact on the job market, stock market and household budgets. The actual downturn might end in 10 months, but it 'may take us longer to bounce back,' said Niv Persaud, a certified financial planner in Atlanta. Recessions are part of America's boom and bust cycle. And here's the good news: Boom times tend to be longer. In the post-WWII era, the average economic expansion has lasted for nearly five years. The National Bureau of Economic Research defines a recession as 'a significant decline in economic activity spread across the economy, lasting more than a few months.' By that definition, a recession isn't a recession until the downturn has persisted for at least a few months. Theoretically, we could be in a recession right now. 'You don't usually find out that you're in a recession until six months after you've been in one,' said Denise Chisholm, director of quantitative market strategy at Fidelity. The economic bureau decides when a recession has started, Fidelity reports, measuring signs of sustained decline in purchasing power, employment data, industrial production, retail sales and gross domestic product, among other factors. Typically, those metrics must fall for several months before the economic bureau invokes the "R" word. But not always: The COVID-19 recession of 2020 lasted only two months. How convenient it would be for wary investors, searching for clues to the market's direction, if stock prices began marching steadily down on the day the economists announced a recession. But the market doesn't work that way. 'The stock market is a leading indicator,' said Robert Brokamp, a senior adviser at The Motley Fool. The market anticipates economic trends, including recessions, months before they arrive. 'It starts to go down, generally speaking, six months before a recession,' Brokamp said. 'And it starts to recover six months before the recession is over, very broadly speaking.' When you consider that we don't know a recession is happening until months after it starts, you begin to understand how hard it can be to make investment decisions in a recession. 'Stocks usually bottom out about halfway through,' said Chisholm of Fidelity. 'So, by the time you have learned you are in a recession, stocks, more often than not, have bottomed.' The stock market and economy don't move in lockstep. Sometimes they seem to move in opposite directions. 'If we go into a recession,' said Silver of Investopedia, 'you might notice that the stock market didn't dip that much at all.' However much investors might fret about the stock market in a downturn, history suggests the market will eventually recover. The S&P 500 took back all of its losses in the Great Recession of 2008, although not until 2013. If you're retired and spending down your savings, then a recession can bring fiscal disaster. For just about anyone else, there's time to rebound. The bigger danger, said Brokamp of Motley Fool, is losing your job. Unemployment hit 10% in the Great Recession, the jobless rate peaking after the actual recession was over. Unemployment reached 14.7% in the brief COVID-19 downturn. People lose jobs in recessions because companies are making fewer goods and selling fewer services, and thus, they need fewer employees. 'If you're still working, and you're not close to retirement, the big issue is job security,' Brokamp said. To buy low and sell high is a mantra of investing. But timing those transactions can be tricky. When to sell stocks is a particularly tough call, for the simple reason that stock prices tend to rise. You could sell your stocks on a day when the S&P 500 hits a record high, only to wake up the next day and watch the market climb higher. Cashing out of the stock market in a recession is generally a mistake, experts say, because of the market's notorious volatility. It's hard to predict when stock prices will slide, how low they will go, or when they will recover. 'Selling stocks to try to protect your portfolio from a recession is going to be an almost impossible enterprise,' said Sam Taube, a lead investing writer at NerdWallet. But buying stocks in a recession, experts say, can be a comparatively safe move. The 'buy low' directive instructs that investors should purchase stocks when the market is down. In a downturn, stock indexes can fall 10% or 20% (or more) below their historic highs. Buying stocks at those times is a relatively easy call. 'History has shown us that the stock market recovers,' said Brokamp of Motley Fool. 'So, if you have the opportunity to buy stocks at a discount, you'll always be happy you did it.' Remember, though, that months or years might pass before the stock market recovers completely from a recessionary swoon. Buying stocks in a downturn makes the most sense for investors who won't need the money for the holidays. This article originally appeared on USA TODAY: 5 facts about economic recessions: You won't know when one's coming Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
