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FORTUNE.COM // MAY.1.19
IN JUNE, ECONOMISTS will mark the 10th anniversary of the end of the
Great Recession. But even as traumatic memories of that crisis recede,
investors collectively have grown more jittery in anticipation of the
next one. Market volatility has soared as relatively minor economic
setbacks trigger frequent, dramatic selloffs. Over the past 12 months,
mutual-fund shareholders have pulled out about $100 billion more
from stock mutual funds and ETFs than they put in—a sign of mount-
ing unease among Main Street savers.
Ask the pros and they’ll tell you that the caution underlying those
jitters is justified. Indeed, 77% of economists expect a recession by the
end of 2021, according to the National Bureau of Economic Research,
with slowing corporate earnings in the U.S. and sluggish growth abroad
stacking the deck against the economy. Investors tend to forget, how-
ever, that not all recessions trigger market crashes. David Kelly, chief
global strategist at J.P. Morgan Asset Management, argues that the se-
vere impact of the past two recessions has conditioned us to expect the
worst. “We often assume when we have a bear market, it’s going to be a
grizzly bear,” says Kelly. “But it might just turn out to be a koala bear.”
That said, even koalas have teeth, and nobody wants to get bitten.
Here, Fortune’s writers take a look at five lesser-known economic
indicators that offer reliable clues about a future slowdown, along with
advice about how to react—without overreacting—to bears of any size.
A RECESSION
IS WRITTEN
IN THE STARS;
BIG LOSSES
DON’T HAVE TO
BE. HERE ARE
FIVE NUMBERS
TO WATCH TO
SPOT A BEAR
MARKET BEFORE
IT EATS YOUR
S AV INGS.
ILLUSTRATION BY CHRIS GASH
