Is the stock and bond market indicating an approaching recession?


SALT LAKE CITY, Utah (ABC4Utah) – There are a lot of factors influencing the latest condition of the stock market. One indicator is the inverted yield curve in the bond market.

Ryan Thacker from BOSS Retirement Solutions explains, “in plain simple terms, the 10 year bond was actually paying less than a two year bonds, when you see that indicator happen, it is typically a sign that a recession will be on its way.”

Implications from other factors may include the trade wars with China and the state of the political environment with an upcoming election. These events and the effect they have on the stock market may be signaling the possibly that a recession is looming.

“When you see that indicator happen, it is typically a sign that a recession will be on its way,” says Thacker.

If that is the case, now is a time to evaluate the risk you may be taking in your portfolio. What you can and need to control is your own plan. Depending on where you are in your financial journey your risk tolerance will be different.

The first thing is avoiding a knee jerk reaction or making an emotional decision. Yesterday’s drop in the market is big and it’s going to get everyone’s attention. What you can do, first, is step back. Remember that the stock market has had a 10-year run which is the longest bull market run in its history of the stock market. That put the situation into perspective. The next thing is to have a plan.

Many families that meet with BOSS Retirement Solutions, even for the first time there, they have risk tolerances when getting ready to go into retirement. The goal is to create The Goldilocks portfolio, which is just the prefect portfolio to balance individual risk.

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