According to the National Bureau of Economic Research, the United States has experienced 13 peacetime expansions in the twentieth century, excluding the recovery from the 1973-75 recession. Combining and averaging the evidence from these cycles, the author comes to the following comclusions.

(1) The ideal time to sell stocks is one to three months before a recession begins. (2) Because the averages have moved over a fairly narrow range prior to cyclical peaks, however, investors would probably do nearly as well by selling eight months before the peak in economic activity.

(3) Although an investor will probably not lose much if he sells his stock several months before activity begins to decline, rather than waiting for clear indications of a recession, he should not hold on after the recession has begun. In only one of the 13 recessions examined (the anomalous 1929) did the market continue to advance during the first six months of recession.

(4) Just as stock prices usually turn down before economic activity begins to decline, they usually turn upward before the business cycle reaches its trough. While on average contractions are shorter than expansions (18 months, versus 27 for expansions), none has lasted less than eight months. Cautious investors should probably wait at least six months into a recession before they start reacquiring stocks.