Business Economics Investing

Predicting Recessions

It’s been an awfully long time since the last recession so we are due for one soon.

The yield curve is close to inverting so a recession must be close.

Valuations are elevated so the market can’t go any higher from here.

Three bearish statements that are prevalent in today’s investment market media, both among pundits and experts alike. I honestly feel I’ve been beaten over the head several times by some of these ongoing narratives. Anyway, great post on Medium about how foolish it is to spend much time trying to read into these narratives to predict when the market is going to correct and/or when the next recession will arrive. I know that makes for a boring news cycle but we would all be much better served with fewer predictions and ongoing narratives that span months and years.

Key takeaway for me: Each cycle is different, especially this one. While historical data and precedent can guide our planning and decision making, we can’t solely look to the most recent or the two most recent cycles to guide those critical parts of our jobs and lives.