In the past century there have been 15 recessions in the US. 11 of those instances, stock returns were positive two years after recession began.
Investors may be tempted to abandon equities and go to cash when there is heightened risk of an economic downturn.
But as research has shown that stock prices incorporate expectations of recession and generally have failed in value before a recession even begins.
The average annualized return two years after the onset of these 15 recessions was 7.8%
A $10,000 investment at the peak of the business cycle would have grown to $11,937 after two years on average
