OT:Investing during a recession

Investing Strategies Mechanical Investing
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Investing during a recession

History suggests what may happen in an economic downturn.

Key takeaways

  • Recessions are not the time to abandon your investment strategy.
  • Bonds and cash have historically outperformed most stocks during recessions.
  • Selling stocks in favor of bonds and cash before a recession may leave you unprepared if stocks bounce back before the economy does, which has happened historically during many recessions.
  • Recessions typically last less than a year before giving way to the early cycle when markets have historically delivered some of their biggest gains.

Investment returns before, during, and after recessions

This chart shows how stocks, bonds, and cash have historically performed at various times in the business cycle.
This chart shows how stocks, bonds, and cash have historically performed at various times in the business cycle.800×368 4.06 KB

Past performance is no guarantee of future results. Asset class total returns represented by indexes from the following sources: Fidelity Investments, Ibbotson Associates, and Bloomberg Barclays as of March 31, 2021. Source: Fidelity Investments proprietary analysis of historical asset class performance, which is not indicative of future performance.

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