The market right now is a bloodbath, with red across the board. Even before the recent meltdown, stocks were off to their worst start to a year since 1939. We have the ultimate bearish mix of rampant inflation and slowing growth, and already several hikes are priced in before the end of the year, seeing stockholders flock to their investment apps in major panic sell-offs.
With this worsening sentiment, Invezz.com decided to look at asset class performance through previous recessions, ascertaining which sectors perform best and by how much. Traditionally, bonds and gold would be the safe havens during market pullbacks, but do the numbers back this up? In the study, we assessed five asset classes: gold, silver, stocks, bonds and real estate.
We used the definition of a recession as outlined by the National Bureau of Economic Research (NBER), which defines a recession as “a significant decline in economic activity spread across the economy, lasting more than two quarters which is 6 months, normally visible in real gross domestic product (GDP), real income, employment, industrial production, and wholesale-retail sales”.
Time Period
The table below highlights five major recessions since the seventies, the date at which we commenced the study. A brief description of these recessions is below.
| Year of Recession | Description |
| Nov 1973 – Mar 1975 | 1973 Oil Crisis after quadrupling of prices by OPEC |
| Jan 1980 – Nov 1982 | Tight monetary policy to refrain rampant inflation from 1970s, which resulted from 1973 Oil Crisis and Energy Crisis of 1979 (in turn caused by Iranian Revolution). |
| July 1990 – Mar 1991 | Tight monetary policy to rein in inflation, high debt and 1990 oil shock |
| Mar 2001 – Nov 2001 | Dot-com bubble pops. 9/11 attack |
