Election cycle and market trends

The election cycle is usually favorable for risky assets, and the market will be more bullish. But if there is a recession, the current price is definitely not the bottom, and there may be a larger gold pit!

What is the signal of a recession?

Look at the unemployment rate! When the US economy is in crisis or recession, the unemployment rate usually climbs to 5.2% or 5.4% or above. Powell of the Federal Reserve once mentioned that when the unemployment rate exceeds 4%, they will consider whether they need to cut interest rates in advance.

What are the expectations for 2024?

The Federal Reserve expects the unemployment rate to be between 4.2% and 4.4%. If the unemployment rate exceeds 4.4%, it means that the economy may have begun to get out of control, and the risk of recession will increase accordingly. Although interest rate cuts may stimulate the market in the short term, in the long run, high unemployment rates are likely to trigger a recession.

How to deal with it?

There is no absolute bottom in the market. The key is to find an investment range that suits you. For long-term investors, you can enter the market in batches, and increase your position as much as you can afford whenever the market falls a certain amount.