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Glossary entry · Money in motion
Recession
Definition
A significant decline in economic activity lasting more than a few months, technically defined as two consecutive quarters of negative GDP growth. Recessions usually mean lower corporate earnings, rising unemployment, and falling stock prices. They are part of the normal business cycle and are followed by recoveries.
Example
The 2008 recession saw the S&P 500 fall by more than 50% from its peak.
Related
Money in motion
Compound interest
Interest paid not just on what you put in, but on the interest you have already earned.
Read →Inflation
The rate at which the general price of things rises. Same money, less purchasing power.
Read →Interest rate
The percentage something pays — or costs — per year.
Read →Return
The gain (or loss) on an investment, usually expressed as a percentage per year.
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