Are We Headed For Another Recession?

Written by Posted On Tuesday, 22 March 2016 10:15

There is growing chatter in the market that the US may be headed for another recession. The biggest problem is that there are those who believe that we never effectively made it out of the last one. With markets going hog wild, there are many average Americans on the sidelines watching their savings and investments plummet and wondering if they should make a mass exodus. Is a recession likely on the horizon? The answer is that it is anyone’s guess, and those who are so certain, really aren’t as certain as they are stating they are.

Volatility in the market generally creates instability in investors, especially those who aren’t going to lose capital if they pull out. Likely, those who will make the first exit are going to be retail investors who aren’t looking out for their own interest. Without much to lose personally, they are incentivized to sell at any cost. For the average investor, volatility may not be a bad thing. It isn’t so much if the market moves up or down, it is in the movement and being on the right side of it, that money is made.

The best advice at this time is to sit tight if you can. The people who usually recover the quickest from Stock market free falls are those who do nothing. Sitting back watching others make their way to the exit door, if you have the time to wait and aren’t looking to use your investment money in the near future, you will benefit from waiting it all out. Why put yourself in the middle of the fallout if you don’t have to?

What we have learned about the market is that what goes up must come down, but in the same respect, what goes down must at some point-rebound. The market will rise again, there are very few who will disagree with that. It is difficult to remain neutral when you see the market lose 10% of its value in just one day, but take heart, it isn’t the first time it has happened, nor will it be the last.

The market is only one indication of what is likely to happen with the economy. Other important factors to consider is GDP, or the gross domestic product. At the end of last year, GDP was on the rise and it was causing many in economic circles to believe that our economy was stronger than we had hoped. The problem is that GDP if not measured properly, may not be an indication of what economists think, which always leaves those watching the economy of signs lost with mixed messages.

There is no doubt that oil is sending the market into a tizzy. Before going overboard, consider the fact that those who are no longer spending their cash on gas, are now putting that money into the economy in other ways. Again, there are always two sides to every story. For now, there is no reason to overreact and take steps that don’t need to be taken.

Perhaps the best way to deal with it is to stop reading the market watch and let things cool down before you make any decisions at all. If you are interested in an advanced degree in business, but worried about tests such as the GMAT, try earning your degree from a program such as Marylhurst University's online mba no gmat, or one of the many programs offered by Adelphi University or Villanova University. It could be the new start you are looking for.

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Marwa Rajpoot


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