‘Recessions always start with an economy that’s been booming’: An investing pioneer explains why he sees 50% chance of a downturn in 2024

• Investing pioneer Rob Arnott said there’s a 50-50 chance of a recession in the coming year.
• Many people think recessions don’t begin with a booming economy, but the opposite is true, he told CNBC.
• US stocks look particularly vulnerable, Arnott added, while bonds are more attractive than they were at lower yields.

The US economy just saw its strongest quarter of growth since 2021, but to investing pioneer Rob Arnott that doesn’t mean the upbeat news will continue into the new year.

While more Wall Street analysts have shifted their views toward no recession in the near term, the founder of Research Affiliates and “godfather of smart beta” investing is less sanguine.