Economic news about recessions are garbage. It's just a mean reverting process.
Eventually, the other shoe will drop, I'm sure, but hell, the Dow is floating around 27k. A little couple hundred point dip is just an opportunity to buy in at a discount.
If you're in the market right now, you may see no gains in the next 3-4 years so you should have a 10 year horizon to realize gains.
Personally though, I just invest in a 3x leveraged S&P 500 ETF and roll with the punches. Unless there’s some cataclysmic event, that 3x leverage will almost always outperform the S&P, even with the volatility drag.
actual returns = return - var(r) / 2
If the S&P 500 has a Sharpe ratio of one and say, a 10% mean yearly return and 10% vol, we first need to turn it into single day returns and volatility (since these leveraged products rebalance daily) so we get:
S&P 500 Daily Returns = S&P 500 Daily Vol = 0.1 / sqrt(252) = .006299 or ~6 basis points
Before the volatility tax, thix means that our leveraged product should get 18 basis points of returns and volatility daily. In our annualized we get:
3x S&P 500 Annualized Returns = Annualized Vol = 29.99%
Now we factor in the volatility tax:
actual returns = .2999 - .2999^2 / 2 = 25.49%
Now comparing with actual market data: https://www.etf.com/UPRO#overview
PERFORMANCE [as of 09/19/19] 1 MONTH 3 MONTHS YTD 1 YEAR 3 YEARS 5 YEARS 10 YEARS UPRO 12.19% 7.41% 64.68% 1.13% 34.64% 22.78% 31.97%
The annualized return of UPRO is 31.97%.
If we look at: https://www.investopedia.com/ask/answers/042415/what-average...
We can see that the S&P 500 3x leveraged is an excellent investment on a non risk-adjusted basis. On a risk-adjusted basis it's worse, the S&P 500 in the example having a Sharpe ratio of 1 while the 3x S&P 500 having a Sharpe ratio of 0.8499. But since you can't eat risk adjusted returns and it's going to be difficult for retail investors to get significant leverage to actually invest in good risk-adjusted portfolios, the 3x daily levered S&P 500 is a fantastic investment.
The prospectus of UPRO [1] : "returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period."