Each time it happens, you'll hear from the reporters and the TV commentators that the country is falling apart and that owning stocks is too risky.
The thing to remember is that we've wiggled out of every recession since the one that turned into the Great Depression.
Reviewing the period from the Great Depressions to 1995 shows that
- the average recession lasts 11 months and 1.62 million jobs are lost, while
- the average recovery lasts 50 months and 9.24 million jobs are created.
The seasoned investor realizes that stock prices may drop
- in anticipation of a recession, or because
- Wall Street is worried about inflation
You have to have faith that inflation will cool down eventually, and that recessions will thaw out.