S&P 500 one year rolling returns and recession
§ Today’s chart looks at the rolling one year returns of S&P 500 since 1948 juxtaposed against periods of recession. Many analysts are of the view that current ongoing recession would most probably turn out to be a “U” shaped rather than the preferred “V” shaped. It is also expected that the current crisis would be worse than the oil crisis infected recessions of 70s but better than the Depression. If the predictions of these analysts turn true then the market will remain in negative territory for many months to come.
§ Despite the bleak picture the chart shows that most of the market recovery starts while the recession is underway. As shown in the chart the market has slid the most since 1948 and tad worse than 1970s hence some more correction might be in store. Notwithstanding the downside risks investing in recession yields good payoffs.