What is Recession?

Fear sells eyeballs 

In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending.

Let's understand some commonly used keywords:

Correction

A market correction refers to a price decline of at least 10% of any security or market index following a temporary upswing in market prices.

Correction: 10% Decline

Bear Market

During a bear market, market sentiment is negative as investors are beginning to move their money out of equities and into fixed-income securities, as they wait for a positive move in the stock market.

Bear Market: 20% Decline

Crash

A stock market crash is a sudden dramatic decline of stock prices across a significant cross-section of a stock market, resulting in a significant loss of paper wealth. Crashes are driven by panic as much as by underlying economic factors. They often follow speculative stock market bubbles.

Crash: 35-60% Decline

Recession

In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending

Recession: 6 Months Economic Decline

Depression

In economics, a depression is a sustained, long-term downturn in economic activity in one or more economies. It is a more severe economic downturn than a recession, which is a slowdown in economic activity over the course of a normal business cycle.
A Recession lasting 2 years and decline in GOP by 10%

Black Swan

A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the practice of explaining widespread failure to predict them as simple folly in hindsight.

Difficulty to predict & Extreme Consequences

Since 1926 to today, 74% percentage of the market has been in the positive