The early 1980s saw two recessions. During the first, stocks fell a little more than 8.0% . In the second, stocks lost slightly over 23% . Once Fed Chair Volker tamed inflation, stocks soared, and the boom was back. In each case, the 10-year Treasury yield fell during the recession .This recession was one of the longest. Sparked by the OPEC embargo against the U.S., it was also one of the worst for stocks.
· The degree to which stocks fall during a recession is affected by how long it lasts, its severity, and the valuation of stocks when it begins.During the Great Depression, after peaking, stocks fell 48% in two months, recouped half of its losses by mid-April 1930, then fell to its ultimate bottom July 8, 1932, a little over two years later. The total loss was 89.2% and it took until November 23, 1954, 25 years later, to surpass its September 3, 1929 peak.
How bad could it get this time? Stock performance is closely tied to corporate earnings, which is tied to economic activity. In the present case, economic activity will be worse than anything we’ve seen in our lifetime. Thus, stocks may fall as much or more than they did during the 2008 recession. While no one has a crystal ball, given the global and U.S. economic shutdown, we could see the worst period since the 1930s.
Good read
Thanks but depressions are normally worse.
Aye cos stocks taste great
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