Apr 29, 2009
I read an article recently profiling five signs that the recession is ending. What signs might you look at to indicate when the recession is ending?  

EFF/KRF: We are not experts, but know enough about the academic research to be skeptical of the signals suggested by casual observers. The academics who study this find that the best leading indicators are not very powerful. It is hard to say when the recession will end until it has.

From an investment perspective, the market is always doing its best to incorporate information about future business conditions in current prices. As a result, other signals about the end of the recession are not likely to help you forecast the market.

Eugene F. Fama
The Robert R. McCormick Distinguished Service Professor of Finance at the University of Chicago Booth School of Business
Kenneth R. French
The Roth Family Distinguished Professor of Finance at the Tuck School of Business at Dartmouth College
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Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.