The conventional shorthand is two consecutive quarters of GDP contraction, though the official arbiter (in the US, NBER) uses a broader definition including employment and industrial production.
Markets often fall in anticipation of recession and start recovering before the official end. Timing entries and exits reliably is very difficult — steady contributions through the cycle usually win.
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Open Decision Lab →Frequently asked questions
Should I stop investing in a recession?
For long-horizon money, usually no. Recession-era prices have historically produced above-average forward returns.
Related terms
Bear market
A period when a major index falls 20% or more from a recent high.
Volatility
How much a price moves up and down over a period.
Dollar-cost averaging (DCA)
Investing a fixed amount on a regular schedule regardless of price.
Yield curve
A chart of bond yields at different maturities, usually for government debt.
Federal Reserve
The US central bank, responsible for monetary policy and financial stability.
Gross domestic product (GDP)
Total value of goods and services produced by an economy.