When a recession is coming, investors need to keep a level head

How should investors react to a looming market downturn? Don’t panic, says Prof. Sebastien Betermier, an Associate Professor of Finance at Desautels. This sounds simple enough, but it’s easier said than done. When a recession is coming, investors tend to think of all of the things that could go wrong, Betermier told Beyond the Headlines, a podcast produced by the University of Toronto’s Munk School of Global Affairs and Public Policy. If investors sell in a panic, it can exacerbate the downturn by driving equity prices even lower. But this behaviour can also create buying opportunities, and, in the past, savvy investors have taken advantage of deflated prices to make investments that appreciate over the long term.