The threat of a “recession” on the horizon paralyzes a lot of people whose only memory of a significant economic downturn revolves around the 2008 crash a full decade and a half ago. In the 18 months after Lehman Brothers imploded, 7.5 million people lost their jobs and it took until 2013 before the job market finally recovered.

But investors know two things. First, not every recession needs to compete with the “great” recession of 2008. Some are shallower than others, especially when the Fed takes an active role in engineering the slowdown in the first place.

As the economy slows, the deepest pain may fall on the hottest industries, which is why some people now are calling this a “Patagonia” recession to reflect the number of Silicon Valley tech and finance workers who will be wearing their unofficial corporate uniform to the unemployment office.

And second, you can’t wait for government economists to tell you when it’s safe to be in the market or not. By the time a recession is officially called, it’s usually been underway for months . . . and the market has probably already taken the hit.

Furthermore, it’s a myth that stocks never bottom out before a recession is officially declared. Just look back to the dot-com recession for all the proof you need.

Back then, the economy was already in decline starting in March 2001. Stocks had been falling for a full year before that formal recession even began.

The market finally bottomed out and started moving up again in September 2001, defying the disruption and shock the 911 attacks left behind. But here’s the thing: Wall Street didn’t get the official word until November 26 2001 that we’d been in a recession for the preceding eight months.

Likewise, the 2008 recession actually started in November 2007, which is exactly when the market peaked. We all knew the economy was reeling.

The official government announcement came in December 2008, over a year late. And while the recession ended in June 2009, we didn’t get confirmation of that until September 2010.

Stocks bottomed out in February 2009, a mere two months after the formal recession call and a full 19 months before the government sounded the all-clear. If you sat out that recovery, you missed a 64% end-to-end return.

What does this mean? Never wait for the government to validate what you see for yourself. The recession that matters is the one that impacts your household finances and your investment portfolio.

If you’re in Silicon Valley, it probably feels fairly cold out there. You’re going to need that fleece vest for comfort while that side of the economy finds equilibrium.

But elsewhere in the economy, things are still running too hot for comfort. That’s the world the Fed is living in. It’s the world of Big Oil, commodities, skilled trades.

There’s no recession there yet. And the stocks are doing just fine. A smart investor should always be rotating out of known weakness and overweight known strength.

Silicon Valley needed to cool off. Wall Street felt the chill a full year ago. Now it’s time for the rest of us to roll with the punches and reap the rewards of the new economy to come.

I did it in the dot-com boom and bust, selling hugely appreciated stocks at levels far above what I initially paid and then rolling into more conventional brick-and-mortar names.

I did it in the 2008 crash. And in the mini-recession of 2020. We’ll keep on doing it.