Some investors may worry about the stock market sinking after a recession is officially announced. But history shows that markets incorporate expectations ahead of the news.

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• The global financial crisis offers a lesson in the forward-looking nature of the stock market. The US recession spanned from December 2007 to May 2009 (shaded area).
• But the official “in recession” announcement came in December 2008—a year after the recession had started. By then, stock prices had already dropped more than 40%.
• Although the recession ended in May 2009, the announcement came 16 months later, by which time US stocks had rebounded.

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‍Investors who look beyond after-the-fact headlines about markets and the economy and stick to a plan may be better positioned for long-term success.

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