It’s one thing to look at history and see that recessions and bear markets have occurred with some frequency; it’s quite another to predict the precise timing of either event. And it’s another thing entirely to devise a strategy that reacts to those predictions. There have been 12 recessions since the end of the Second World War, or an average of about two per decade. You can use this as a very rough rule of thumb for the future… If I plan on investing for the next 30 years, I should count on things getting ugly at least six times. Maybe it’ll be a little more, maybe less. But I have an expectation, a rough idea of how the game works. But it’s not a forecast. A forecast is, "We will enter a recession in the first half of 2018." That’s precision, with a disregard for both the history of people making such forecasts and the events that cause recessions — which, a lot of the time, can’t be foreseen. The important difference between an expectation and a forecast is the impact it has on ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.