As we grip the uncertainties of inflation, war & rising interest rates, all assets have been correcting throughout the year with USD cash being the only appreciating asset. However, in July, markets seem to have moved away from risk of rising prices. The fears at the forefront now are of a recession caused by over-tightening by central banks (higher than anticipated liquidity removal from the system).
Few things to know about markets & personal finance:
Your portfolio should let you sleep in peace. Being diversified, defensively positioned and avoiding speculations (cryptos, margins, meme stocks) would in most times generate better long-term returns. Emerging markets like India never bottom before US markets in a rising interest rate environment. Timing the economy is tough and timing the financial markets is tougher. The 2008 financial crisis induced recession started in December 2007 but was only made official in December 2008. Similar to that, every recession & stock market performance has limited correlation. Here is a look at every recession since WWII along with S&P 500 returns in the 6 months leading up to the recession, during the actual recession itself and then one, three, five years and ten years from the end of the recession:
