The stock market's history with recessions 📉

Investing in the stock market means having to stomach periods of difficulty 😭

I’m not convinced we’re doomed for a recession. But as I’ve been saying for months, I think it’s getting harder to argue that growth is destiny.

With the Trump administration’s announcement of aggressive tariffs on all U.S. trading partners, the risk we soon fall into a recession has intensified.

In the same way it’s prudent for investors to always brace for stock market volatility, I think it’s sensible to be on guard for the possibility of a recession in the near future. Whether you like it or not, recessions happen. And the stock market is very exposed to the U.S. economic cycle: S&P 500 companies generate around 60% to 70% of revenue inside the country.

This does not necessarily mean you should be thinking about bailing out of stocks. Timing market tops is incredibly hard, and it puts you at higher risk of underperforming over the long run.

However, this discussion might have you revisiting your long-term financial plan as you learn about your willingness to stomach short-term volatility.

Because historically, recessions usually come with sharp declines in the stock market.