H. Craig Rappaport, author of “Live Long, Live Rich: Creating Your Retirement Paycheck,” writes:

We are in a recession psychologically; the data just hasn’t confirmed it economically. It will. The average market selloff prior to a recession is close to 15%. As soon as the data, the GDP, turns negative, which appears to be coming in the first quarter, equity markets tend to turn higher anticipating a recovery. Markets generally rise about 10% in this period and another 8% after the recession ends.

Investors should be focused on those sectors that tend to do well exiting a recession: consumer cyclical, basic industry, technology and capital goods. Financials also do very well but there is concern whether they will participate.