Recession

A significant, widespread, and prolonged decline in economic activity, traditionally defined as two consecutive quarters of negative GDP growth, though the official U.S. determination is made by the NBER (National Bureau of Economic Research) using a broader set of indicators. Recessions historically occur every 5-10 years and are often preceded by yield curve inversions, tightening monetary policy, and deteriorating consumer confidence. For traders, recessions tend to be devastating for cyclical stocks but can create generational buying opportunities in quality companies.