Putting weakened economic conditions into perspective, President Harry S. Truman said: “It’s a recession when your neighbor loses his job; it’s a depression when you lose your own.” Although neither condition exists now, concern that the U.S. economy might face a recession recently has some investors unnecessarily in a state of depression.

Typically, the formal declaration of a recession comes from the National Bureau of Economic Research (NBER), which determines that back-to-back quarters of negative GDP growth constitute a recession. The formal recognition of the timing of the onset of a recession, however, often comes long after a recession has begun and in some cases after it is over, which does little to help investors. For long-term investors what recessions present is far more important than when they begin.

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