Recession

A recession is when a country's economy shrinks for at least six months in a row—meaning people and businesses are producing and spending less overall. You'll hear economists and news outlets talk about recessions because they affect your job prospects, savings, and stock prices. During a recession, companies often earn less profit, so their stock values typically fall, and unemployment rises. For example, if TechCorp's revenue drops 20% because fewer customers are buying their products during a downturn, its stock price might fall too. Recessions are a normal part of the economic cycle, though painful while they happen. Understanding them helps you make smarter investment decisions and prepare your portfolio for tougher times.