by: Derek Skomorowski
Wait – didn’t the majority of economists predict a recession for the first half of 2023?
Wasn’t it absurd to think Chair of the U.S. Federal Reserve Jerome Powell could raise interest rates by 500 basis points (bps, or 5%) in just over a year – and if he did, wouldn’t he break the economy??
Aren’t we in a banking crisis?!? It’s what makes investing based on macro forecasts so hard – even if you get the event right, the impact to markets is impossible to predict. Yes, this is another sermon on market timing. The futility of trying to get the timing right and how expensive it can be to be wrong.
The question that comes up most when talking to investors is whether it makes sense to invest today if we’re sailing headlong into a recession. The truth is, if you know with absolute certainty that in the next few months we’re headed into a recession and that any recession isn’t already reflected in the price, then you might as well wait for that better opportunity that’s right around the corner. But you better be right. Fast.
Read the rest online: Bad Timing
Or download the article: Q2 2023 Fixed Income Commentary