Close this search box.

Keep Calm and Carry On


Economists surveyed by the Wall St. Journal now say there’s a 44% chance of a recession—up from just 18% in January. The newspaper noted that “a 44% recession probability is seldom seen outside of an actual recession.”1

What should investors consider doing in response to this seemingly alarming news? Arguably, a lot less than they might think.

Making major investment moves, such as jumping in and out of the market, based on the possibility of a recession—and even the high likelihood of a recession happening—could very well be a recipe for disappointment. That’s because, as the chart below reveals:

  • The average length of the 12 recessions since World War II was just over 10 months.
  • Stock prices peaked roughly 6 months prior to the actual start of the recessions, on average.
  • On average, stock prices bottomed out around 4.5 months before those recessions ended.

The takeaway: By the time we actually know we’re in a recession, stock prices have likely already fallen—and by the time we know the economy is back on track, stock prices have almost certainly risen.

What’s more, economists have a terrible track record when it comes to predicting recessions. One study by the International Monetary Fund that looked at 153 recessions in 63 countries found that the vast majority were missed by economists.2

At Horizon, there are many ways we position our goals-based Gain, Protect and Spend portfolios to reflect developments in the economy and other factors. Taking risks based on recession predictions isn’t one of them—and we don’t think it should be for investors, either.

1 The Wall Street Journal, June 19, 2022

2 International Monetary Fund, “How Well Do Economists Forecast Recessions?”, March 5, 2018

This commentary is written by Horizon Investments’ asset management team.

Nothing contained herein should be construed as an offer to sell or the solicitation of an offer to buy any security. This report does not attempt to examine all the facts and circumstances that may be relevant to any company, industry or security mentioned herein. We are not soliciting any action based on this document. It is for the general information of clients of Horizon Investments, LLC (“Horizon”). This document does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any analysis, advice, or recommendation in this document, clients should consider whether the security in question is suitable for their particular circumstances and, if necessary, seek professional advice. Investors may realize losses on any investments. Index information is intended to be indicative of broad market conditions. The performance of an unmanaged index is not indicative of the performance of any particular investment. It is not possible to invest directly in an index.

Past performance is not a guide to future performance. Future returns are not guaranteed, and a loss of original capital may occur. This commentary is based on public information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. The opinions expressed herein are our opinions as of the date of this document. These opinions may not be reflected in all of our strategies. We do not intend to and will not endeavor to update the information discussed in this document. No part of this document may be (i) copied, photocopied, or duplicated in any form by any means or (ii) redistributed without Horizon’s prior written consent.

Other disclosure information is available at

Horizon Investments and the Horizon H are registered trademarks of Horizon Investments, LLC

©2022 Horizon Investments LLC

You are now leaving this website to go to