How Much Can One Profit From a Recession?

Introduction

There are fears that market will plunge during a bear market in a recession. But a study has shown that market could rebounce and rise 25% from its low before the recession is officially declared to be over.

The Table

The attached table from a study shows 14 recessions where bear market lasted for 6 to 34 months, the longest being the “Great Depression” in 1929. The table shows the following:

a) An average return of 8.7%, if one were to stay invested throughout the recession periods;

b) A profit as high as 25% if one were to invest during the lows and take profit by the time the recession is declared over.

The table also shows that not all the recessions have noticeable bear markets and also, 8 out of 11 recessions have created another new bull market when the recession is over.

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The Comparison Chart Between Various Recessions
One can compare the performance of various recession by following this link.

Disclaimer:
Information here is for sharing and learning. It is not intended to give any advice on any stock or movement or trend of any index. If a price or movment of a stock/index is given, it is only intended for illustration. The reader shall verify the information given here before using them.