Some of the best equity returns can often be achieved in the last few years and months before a recession. Of course, staying invested late in the cycle is not without risks – the biggest being overstaying your welcome.

Towards the end of 2018, it was feared that the global economy was slipping towards recession. This led to a sharp sell-off in global equities. In the eurozone, economic activity has slowed sharply from its 2017 peak. The UK economy is still constrained by Brexit concern, while in China growth continues to slow as trade friction impacts already slowing growth. The US is the only major economy that remains fairly resilient thanks in part to the fiscal stimulus in late 2017, which provided a temporary boost to earnings and GDP. This helped stretch out the business cycle, while the consumer sector is also benefiting from full employment and rising wages.

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