Happy Friday! In today’s email:

• Is a recession coming in 2024?

  

  Of the last 15 times the Fed has completed a rate hike cycle, 13 times ended in a recession.

• Fast food prices have outpaced inflation since 2014

• S&P 500 bull markets vs bear markets: How long they last

• Reminder: Upgrade your subscription to unlock the full length weekly newsletter which includes: my ETF portfolio, more market commentary and Weekly Q&A’s below

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Is A Recession Coming in 2024?

To talk about a recession, we need to first understand what a recession is. While some may have tried to change the definition, it has been said a recession is two consecutive quarters of negative GDP. The last time we were in a recession was in 2020.

So is a recession coming in 2024?

Well, your guess is as good as mine. There seems to be a pretty split belief on this question. Some experts say we will see a recession in 2024. Others say we will not see a recession in 2024.

For example, economist David Rosenberg says “there's an 85% chance the US economy will enter a recession in 2024.”

On the other hand, a December survey from the National Association for Business Economics found that 76% of economists believe the odds of a 2024 recession are 50% or less.

Or Kalshi users predict there is only an 8% chance of a recession in 2024:

The answer: No one really knows.

How to prepare for a possible recession?

All we can do is focus on what we can control. Make sure we are not overspending on credit each month. Make sure we are not make bad decisions with our money each month. If you believe there will be a recession & you fear loss of income, beef up your savings/emergency fund. If you are worried about a recession, focus on paying down high interest debt right now. If you are worried about a recession, be sure to focus on keeping your monthly cash flow (i.e. it is not a time to be slacking at your job/business).

My investing plan: If we see a recession + market crash in 2024 (or 2025 or 2026 or anytime in the future), I will keep on with my plan. Nothing changes. Since I have a long time horizon, if we see a market crash, I will keep on adding every single week.

Fast Food Prices Are Getting Out Of Hand

Fast food prices have outpaced inflation by A LOT since 2014.

While actual inflation is 31%, some of the most popular fast food places have increased their prices as much as 100% (thanks McDonald’s) in the same time period.

S&P 500 Bear Markets vs Bull Markets

This is why it pays to think long term. While we have had nearly the same amount of bull and bear markets since 1926, the average bull market lasts longer (meaning your money is growing) than the average bear market. If we enter another bear market in the future (which we will at some point), remember this post.

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