What exchange traded fund (ETF) investors and Wall Street analysts have suspected for awhile is officially confirmed: the United States is in a recession, and it’s been going on for one year. The question now is, where does an investor go from here?
Aaron Siegel for Investment News reports that the National Bureau of Economic Research Inc. confirmed that, numbers and indicators aside, we are in a recession. The classic indicator of a recession is two consecutive quarters of negative economic growth as measured by a country’s gross domestic product (GDP).
NBER, however, defines a recession as a “significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income and other indicators.”
The economy lost 240,000 jobs in October, as the unemployment rate rose to 6.5%, a 14-year high. A total loss of jobs in November is expected at 325,000. Declines are sharp in industrial production, manufacturing and retail sales – all classic recessionary signs.
It could be too soon for ETF investors to get back into the market at the moment, as volatility remains and most funds are sharply below their long-term trend lines. However, it is never too soon to start evaluating your investment plan and having a solid strategy set in place for the time when the opportunity presents itself.