5 months ago • 4:14 mins
Goldman Sachs is famous for its recession manual: a deep-dive handbook on past recessions and what brought them about. And now, with every economist and their dog predicting that the US is headed for a dramatic slowdown, it’s the perfect time to pick up the manual, dig into the three metrics it focuses on, and see what it can tell us about what comes next.
In the past 12 recessions, the median drop of the S&P 500 – measured from peak to trough – was 24%. That means they dropped less than that on six occasions, and rose by more on the other six. But when they dropped more, they dropped a lot more: 48% in 1973, 49% in 2001, and 57% in 2008. It took a while for prices to go from peak to trough too: as long as 30 months in 2001.
But there’s a risk of a rude awakening. So Stéphane says you might want to approach the latest stock rally with caution.
The global investment firm has updated its outlook for 2023. So Stéphane’s taken a look at how it sees things going and what you can do to prepare for it.
Big fund managers and retail investors alike are starting to see its beauty, but as Russell notes, you can still buy this long-shunned asset at good prices.