Saturday, October 25, 2008
Recession
Though it hasn't been officially declared, because the data takes a while to measure, our country is in a recession that started in December of 2007. I see the effects of it every day as an increase in overdraft charges, maxed out credit cards, and businesses failing. I predict that the recession will last 17 months until May 2009. I was doing some research today on what the stock market did during the last two comparable recessions from July 1981 to November 1982 and November 1973 to March 1975. Since Wall Street tends to predict the health of the economy 6 months ahead of time on average, US companies stock prices started recovering in share price in July of 1982 and October of 1974. What does that tell us? It tells me that if my prediction of the time the recession ends is right that the best time to invest will be November to December of this year. That is if anyone can find enough cash to invest in these tough times. For those that do, it is not unlikely to expect 2 year returns of 30 to 50%. Reference this post in 6 months to see if i was right.
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