It has come to this: Even fairly bullish outlooks about the US stock and bond markets are beginning to assume that there will be some kind of recession. The question is what kind – shallow or deep, a full-bore recession or a milder downturn. While steeply rising interest rates are making a slowdown in economic growth all but inevitable, there are many possible varieties of recession, and they suggest different market outcomes.

Deep recessions are horrible experiences for most people, including investors. If you are living off your holdings, with no margin for error, you need safe, fixed-income assets. But if you are lucky enough to have a long horizon, of a decade or more, the best approach may be to keep buying and holding stocks and bonds, even if conditions worsen.