Check out two really good slides.
The first slide outlines the vast difference of when a recession really occurs and markets anticipate the recession and react, versus when the government (the NBER, National Bureau of Economic Research) “declares” a recession.
For example, in 2020, during the long coronavirus slowdown, the NBER said a recession lasted for just two months. The slowdown in reality occurred for over a year, jobs were lost and businesses closed… and finally the economy recovered in mid-2021. Stock markets had declined in late 2019 through early 2020 and then gradually rose all during 2020, anticipating the economy recovering – which came much later. Similarly, back in 2007-2008 (see chart above) there was a recession that started in reality in December 2007 but was not “declared” until December 2008! Markets declined all through 2007 and then began recovering dramatically in early 2009 in anticipation of the economic recovery.
The point of this information is to state that what we have seen to date in 2025 is market reaction to uncertainty – possibly indicating continued uncertainty, stock market weakness and a recession – but no one knows for sure. And even if a recession does occur, no one knows for sure when markets may begin to anticipate an economic recovery.
This is where the second chart (below) comes in: missing the best week, best month, best 3 months or best 6 months in a long-term (over 20 year) period of investing. Staying invested for longer periods of time – in a globally diversified portfolio with a plan – can prevent mistakes from attempting to time the market in the short-term.
These are not easy times. Checking in with, or hearing from, your financial adviser on these data points can help keep a plan on track.
This material has been prepared for informational purposes only and is not intended to provide, and should not be relied upon for, tax, legal or accounting advice.