With the stock market hitting all time highs each day, investors are wondering if a recession is imminent. Some predict a recession is going to happen in 2020 while others think a recession will occur before year-end 2019. First, let’s define what a recession is and what it is not. By definition, a recession is two consecutive quarters of negative GDP (Gross Domestic Product). A recession is not a sharp decline in the stock market or consecutive months of negative returns in the stock market. The stock market is only one of many leading economic indicators. So how can we spot the next recession before it happens and protect our portfolios? The short answer is you cannot predict the market or the economy, but you can monitor key economic indicators to see where we are in the business cycle. The business cycle is the natural progression of the economy and consists of four phases: expansion, peak, recession, and recovery. Knowing where we are in the business cycle helps us make informed investment and business decisions. Below are explanations of each phase in the cycle in their order of occurrence.  

Despite the recent gyrating stock market, the economy is still doing quite well based on many indicators. Since October 2018, the stock market is down over 10 percent and in some sectors down almost 20 percent. Does this mean we are entering a recession? A recession is technically defined as a period where Gross Domestic Product (GDP) declines in two consecutive quarters. GDP is the total revenues earned by a country for a given period of time. Based on the factors mentioned below, many of the current economic indicators do not point towards a recession in the near future. That’s not to say a recession will not occur at some point.