Markets
Everything You Need to Know About Recessions
Everything You Need to Know About Recessions
Just like in life, markets go through peaks and valleys. The good news for investors is that often the peaks ascend to far greater heights than the depths of the valleys.
Today’s post helps to put recessions into perspective. It draws information from Capital Group to break down the frequency of economic expansions and recessions in modern U.S. history, while also showing their typical impact.
What is a Recession?
Not all recessions are the same. Some can last long while others are short. Some create lasting effects, while others are quickly forgotten. Some cripple entire economies, while others are much more targeted, impacting specific sectors within the economy.
Recession is when your neighbor loses their job. Depression is when you lose yours.
– Harry Truman
According to the National Bureau of Economic Research, a recession can be described as a significant decline in economic activity over an extended period of time, typically several months.
In the average recession, gross domestic product (GDP) is not the only thing shrinking—incomes, employment, industrial production, and retail sales tend to shrink as well. Economists generally consider two consecutive quarters of declining GDP as a recession.
The general economic model of a recession is that when unemployment rises, consumers are more likely to save than spend. This places pressure on businesses that rely on consumers’ income. As a result, company earnings and stock prices decline, which can fuel a negative cycle of economic decline and negative expectations of returns.
During economic recoveries and expansions, the opposite occurs. Rising employment encourages consumer spending, which bolsters corporate profits and stock market returns.
How Long Do Recessions Last?
Recessions generally do not last very long. According to Capital Group’s analysis of 10 cycles since 1950, the average length of a recession is 11 months, although they have ranged from eight to 18 months over the period of analysis.
Jobs losses and business closures are dramatic in the short term, though equity investments in the stock market have generally fared better. Throughout the history of economics, recessions have been relatively small blips.
Average Expansion | Average Recession | |
---|---|---|
Months | 67 | 11 |
GDP Growth | 24.3% | -1.8% |
S&P 500 Returns | 117% | 3% |
Net Jobs Added | 12M | -1.9M |
Over the last 65 years, the U.S. has been in an official recession for less than 15% of all months. In addition, the overall economic impact of most recessions is relatively small. The average expansion increased GDP by 24%, whereas the average recession decreased GDP by less than 2%.
In fact, equity returns can be positive throughout a contraction, since some of the strongest stock rallies have occurred in the later stages of a recession.
Buying the Dip: Recession Indicators
Whether you are an investor or not, it would be wise to pay attention to potential recessions and prepare accordingly.
There are several indicators that people can watch to anticipate a potential recession, which might give them an edge in preparing their portfolios:
Recession Indicator | Why is it Important? | Average Length Until Recession |
---|---|---|
Inverted Yield Curve | Often a sign the U.S. Fed has hiked short-term rates too high or investors are seeking long-term bonds over riskier assets. | 15.7 months |
Corporate Profits | When profits decline, businesses cut investment, employment, and wages. | 26.2 months |
Unemployment | When unemployment rises, consumers cut back on spending. | 6.1 months |
Housing Starts | When the economic outlook is poor, home builders often cut back on housing projects. | 5.3 months |
Leading Economic Index | Aggregation of multiple leading economic indicators. gives a broader look at the U.S. economy. | 4.1 months |
This is not a magic rubric for anticipating every economic downturn, but it helps individuals see the weather patterns on the horizon. Whether and where the storm hits is another question.
Markets
Graphene: An Investor’s Guide to the Emerging Market
The market value of graphene could reach $3.75 billion by 2030. As the emerging industry shows fast growth, it also faces obstacles.


Graphene: An Investor’s Guide to the Emerging Market
Graphene is an atomic-scale “honeycomb” that is revolutionizing the world of materials and capturing investor attention.
Experts predict that its market value could reach the billion-dollar threshold by 2027 and soar to a staggering $3.75 billion by 2030.
In this infographic sponsored by HydroGraph, we dive into everything investors need to know about this exciting industry and where it’s headed.
Promising Properties
Graphene possesses several unique physical properties which contribute to its wide range of potential applications.
- 200 times stronger than steel
- Harder than diamonds
- 1,000 times lighter than paper
- 98% transparent
- Higher electrical conductivity than copper
- Heat conductivity: 5 times that of copper
- 2,630 m² of surface area per gram
Since its first successful isolation in 2004, graphene’s properties have opened the doors to a multitude of commercial applications and products.
Applications of Graphene
Graphene has permeated numerous sectors like electronics, energy, and healthcare because of its impressive array of end uses.
Industry | Revenue CAGR of Graphene Across Industries, 2022-2027 |
---|---|
Biomedical and Healthcare | 52% |
Electronics and Telecommunications | 34% |
Energy | 25% |
Aerospace and Defense | 16% |
Other End-User Industries | 17% |
Graphene’s antibacterial properties make it highly suitable for medical instruments and implants. Furthermore, it has shown remarkable potential in helping treat diseases such as cancer.
Another one of the material’s applications is its ability to emit high-speed light pulses, or to combine graphene’s thinness and high-conductivity to create the tiniest possible light sources.
All in all, it’s difficult to sum up graphene’s properties and potential applications in one place. The supermaterial has been covered and cited in thousands of academic journals, and comes up with over 2 million search results on Google Scholar.
Graphene Commercialization
Graphene has evolved from a scientific breakthrough to a commercial reality in less than two decades, putting it firmly on the radar of many future-focused investors.
But despite the strides the industry is making, it is still in its infancy, and therefore challenges exist on the path to widespread adoption. Here are the top five commercialization obstacles perceived by industry players.
Obstacle | % of survey respondents |
---|---|
Cost | 31% |
Production Methods, Scaling, and Distribution | 21% |
Material Quality/Consistency | 17% |
Lack of Knowledge/Awareness | 15% |
Dispersion/Handling | 14% |
When transitioning cutting-edge materials from the laboratory to consumer products, challenges like these can be expected. But one company is tackling them head-on.
By producing 99.8% pure graphene, and ensuring batch-to-batch consistency, HydroGraph is helping meet the growing demand for graphene products across industries while addressing challenges like cost, scale, and quality.

Interested in learning more? Explore investment opportunities with HydroGraph now.

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