Here's How Americans Protected Their Investments During Past Recessions vs. Today
If you’re worried about a coming recession, you might have good reason.
Since World War II, the U.S. has entered a recession about once every 6.5 years, according to an analysis from Kiplinger. Here’s the bad news: It has now been about 6.5 years since the last recession.
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On the bright side, a recent report from U.S. Bank downplayed the current risk of recession due to continued economic growth (albeit slowly) as well as “steady” hiring and consumer spending.
If the U.S. were to enter a recession, here’s a look at how Americans might change the way they protect their investments compared with previous recessions.
How Past Recessions Impacted Investments
Although the definition of “recession” is pretty standard, the impact on investment strategies can differ greatly from one recession to the next.
As the Tax Foundation noted, the U.S. officially enters a recession when the National Bureau of Economic Research sees a “significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production and wholesale-retail sales.”
But that definition only tells part of the story. Here’s a look at how the most recent U.S. recessions have differed, according to a blog from financial and accounting firm CliftonLarsonAllen (CLA).
2020 COVID-19 Recession: Because banks entered the pandemic “well capitalized” and credit markets “remained functional,” this recession didn’t last long and didn’t have a huge impact on investing. As JPMorganChase noted, individual participation in financial market investment saw “considerable growth” during COVID.
2008 to 2009 Great Recession: This recession followed a global financial crisis caused by a “massive asset bubble” centered around housing and credit. Stock markets plunged as many investors went into panic-selling mode. Americans in general were hesitant to put their money into sinking equity and housing markets.
2001 Dot-Com Recession: After the tech bubble burst in the late 1990s, the U.S. experienced a period of “falling equity values, reduced business investment and corporate retrenchment,” according to CLA. Investment in tech stocks slowed so much that the Nasdaq wouldn’t reach another all-time high until 2015, according to Yahoo Finance.
1990 to 1991 Recession: Events such as the Gulf War and savings and loan crisis led to a slowdown in both business investment and consumer confidence. However, the stock markets continued to rise as Americans showed faith in equity markets, per Macrotrends.
What To Expect From the Next Recession
If the U.S. does go back into a recession — which could still be a ways off — you can expect Americans to be more cautious about investing, according to a June 2026 report from the Allianz Center for the Future of Retirement.
In this respect, a recession today would differ from the recessions of 2000 and 1990 to 1991, when Americans felt comfortable buying stocks even as they reined in spending in other areas. At the same time, you might not see Americans dump their investments the way they did following the early-2000s dot-com crash and late-2000s financial crisis.
Only 25% of Americans surveyed by Allianz said it’s a good time to invest in the market. That was down from 34% the previous quarter and represented the lowest percentage since the second quarter of 2022, when the inflation rate surged to a 40-year high.
“Market volatility makes it more difficult for Americans to feel confident about your financial future,” said Kelly LaVigne, vice president of consumer insights at Allianz Life. “During times of volatility like we have experienced recently, Americans may pull back or reduce risk exposure … These findings highlight a growing need for strategies that help manage risk while maintaining long-term growth potential.”
Editor’s note: Investing involves risk, including the possible loss of principal. Always consider your individual circumstances and consult with a qualified financial advisor before making investment decisions.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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