Apart from the recent bout of volatility, it's been a decent year for the broader stock markets. Despite continuously rising interest rates, the risk of recession seems to be on the downtrend, with Goldman Sachs (GS) recently lowering its recession odds once again, this time to 15% from 20%. Indeed, the recession everybody on Wall Street saw coming may fail to land. And that's great news for investors who stayed the course and bought on the dip created by last year's bearish descent.
Just because the recession risks have fallen considerably (it seemed like a 50/50 shot we'd be in a recession for most of last year) does not mean it's time to be complacent and double down on red-hot momentum stocks. If anything, it may be time to lighten up, and perhaps prepare for a potential economic shock that could hit investors when they least expect it.
