Let the Market Reveal the Future

There’s nothing good about a recession. It puts your job at risk. Your bonds earn lower interest. And your favorite stock investments turn to mush as corporate profits head south. If you’re not careful, your savings get smaller rather than larger.

Yet, the best thing you can do for your portfolio is to invest in stocks in the middle of a recession.

The reason is simple. The market runs ahead of the economy. While the economy is mired in a deep funk, the market is racing ahead – anticipating a recovery. Instead of continuing to drop, it breaks its fall, turns around, and heads back up.

But don’t try to predict when this will happen. Wait for it. See it with your own eyes. Then jump in. A good place to start would be with value companies or mutual funds specializing in value investing.

It’ll feel early. Just keep reminding yourself: We live in the present. The market lives in the future.

[Ed. Note: ETR's Investment Director, Andrew Gordon, is the editor of INCOME, a monthly financial advisory service that uncovers income-generating stocks that promise safety (first and foremost), along with much-higher-than-average profit potential.]

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