Economics
Recession
Recessions are a normal, if painful, part of the economic cycle. In the United States, the National Bureau of Economic Research officially dates them, looking well beyond the popular shorthand of two consecutive quarters of falling GDP.
During a recession, unemployment usually rises, corporate profits fall, and consumers pull back. Central banks often respond by cutting rates and loosening policy to cushion the blow.
For investors, recessions reshuffle which assets lead. Defensive sectors and safe-haven assets tend to outperform, while cyclical and speculative names typically suffer the sharpest declines.
Example
Heading into a recession, investors often rotate toward defensive stocks and Treasuries in search of safety.
Recession — FAQ
What is Recession?
A recession is a significant, broad-based decline in economic activity lasting more than a few months, typically visible in output, employment, income, and spending.
Can you give an example of Recession?
Heading into a recession, investors often rotate toward defensive stocks and Treasuries in search of safety.
Understanding creates conviction.
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