Getting ready for the next recession

It’s only natural to talk about what might be ahead for markets and the economy. We’re currently living through one of the longest economic expansions on record (120 months and counting). This means looking ahead to the next recession. A recession, sometimes called a “contraction,” refers to a decline in economic activity and is, unfortunately, a fact of life in the business world. They can sometimes trigger steep declines in the stock market, and that’s one of the reasons we are always on the lookout at Azzad. We need to know where markets might be headed when the next recession happens, which it inevitably will. It’s not a question of “if,” but “when.” Research shows that although there have been 11 recessions since World War II, only three of them triggered particularly severe market downturns: 1973-1975 (market decline of 48%), 2000-2001 (market decline of 49%), and 2008-2009 (market decline of 56%). Looking at the causes of each of those recessions/bear markets, each of them followed a unique series of circumstances in economic history. The 1973 recession was triggered by an oil embargo targeting the United States, and the 2000 and 2008 recessions were largely due to bubbles in the internet