Does the Setting Sun Scare You?
I would guess it probably doesn’t. In fact, many times you probably find beauty in sun sets, I do.
Why doesn’t it scare you?
Because you know that this is a repeating process, and as adults we understand it’s just the rotation of the earth that causes the “sun to set.” We learned as children that morning comes without fail.
Let’s use the setting of the sun as an analogy in how we can think about recessions.
Somewhat like the path of the sun across the sky rising and falling, recessions are preceded and followed by periods of economic growth. One cannot happen without the other.
If we understand recessions are going to come and then go, we shouldn’t be overly concerned about the next recession - assuming your financial house in order. Some areas that should be thoroughly reviewed:
Assuming everything is in order, let’s look at the glass half full and look past the next recession with our eye on the growth period that will follow the next recession.
Just as the sun will rise after the sunset that preceded it, there will be another prosperous period that follows the next recession.
-Paul R. Rossi, CFA
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