Note: An earlier version of this article was first published in The Business Times on 26 July 2022
Lately, the dreaded “R” word has been making its rounds. Yes, I’m talking about a recession, a risk that is not confined to any specific country. In fact, in early July, the chief of the International Monetary Fund, Kristalina Georgieva, warned that a global recession cannot be ruled out.
The thing is, recessions are not within our control. Yet, as investors, we are affected by it. This begs the question, what should stock market investors do now that the possibility of a recession looms in the background?
I don’t have a panacea, but what I can offer are historical perspectives – truths, if you will – about stocks and recessions. The US stock market is a great case study. According to the Visual Capitalist, the USA accounts for nearly a quarter of global...