Recession

A recession is when a country's economy shrinks for at least six months in a row—meaning people are buying less stuff, companies are hiring fewer workers, and overall economic activity is slowing down. You'll hear about recessions in the news because they affect your job prospects, how much your investments are worth, and whether companies can afford to pay dividends. During recessions, stock prices often fall because investors worry about corporate profits dropping. For example, if a recession hits, TechCorp might cut its workforce by 10%, which could cause its stock price to decline. Recessions are a normal part of the economic cycle, but they're worth paying attention to when you're investing, since different stocks perform differently depending on economic conditions.