Which Investments Do Best—and Worst

We ran the numbers for seven recessions, and found a big difference between what fared well in the period leading up to recessions and during the recessions themselves

With academics, economists and pundits arguing over whether the U.S. is in a recession, many investors are wondering how to shift their portfolios amid the current economic uncertainty and its effect on financial markets.

If we are in a recession, what’s the best way to reposition a portfolio to maximise returns? And if this is just the lead-up to a recession, what then?

My research assistants, Zi Yang and Yuge Pang, and I decided to examine how various asset classes have fared leading up to recessions and during recessions—as defined by the National Bureau of Economic Research—over the past 50 years. We studied the seven recessions in that period (1973-75, 1980, 1981-82, 1990-91, 2001, 2007-09 and 2020) and found that growth stocks led the way in the lead-up to recession. But, once we entered a recession, fixed income far outperformed equity, with international stocks providing the worst returns by far.

The asset classes we examined were U.S. high-yield bonds, U.S. long-term bonds, U.S. short-term bonds, U.S. total fixed income, U.S. growth stocks, U.S. value stocks, U.S. small-cap equity, international equity and U.S. large-cap equity.

In the nine months before the start of a recession, U.S. growth stocks delivered an average monthly return of 0.92% (a compound annualised return of 11.6%), followed by U.S. small-cap equity at 0.83% monthly (10.4% annualised). U.S. total fixed income averaged a monthly return of just 0.48% (5.9% annualised).

But in a recession, U.S. total fixed income averaged a monthly return of 0.62% (7.7% annualised), while U.S. growth stocks returned an average of 0.12% monthly (1.5% annualised). Returns were negative for every other equity class we studied.

Among the fixed-income classes, U.S. high-yield bonds are notable for having the lowest average monthly return of any of the asset classes we studied in the lead-up to a recession, at 0.14% (1.7%% annualised), and for being the only fixed-income class with a negative return during a recession, at a monthly average of negative 0.08% (minus 0.9% annualised).

On the equity side, international equity was easily the worst performer in a recession, at negative 0.93% a month on average (minus 10.6% annualised). That compares with an average monthly return of 0.80% (9.9% annualised) in the lead-up to a recession—the biggest difference for any asset class between returns before and during a recession.

The takeaway from it all, if history can tell us anything, is that once we enter a recession, the average investor best be prepared to head toward fixed-income assets and get out of international equities.

For some vacationers, the ideal getaway involves $1,200 ozone therapy or an $1,800 early-detection cancer test.

Call it the longevity vacation. People who are fixated on optimising their personal health are pursuing travel activities that they hope will help them stay healthier for longer. It is part of a broader interest in longevity that often extends beyond traditional medicine . These costly trips and treatments are rising in popularity as money pours into the global wellness travel market.

At high-end resorts, guests can now find biological age testing, poolside vitamin IV drips, and stem-cell therapy. Prices can range from hundreds of dollars for shots and drips to tens of thousands for more invasive procedures, which go well beyond standard wellness offerings like yoga, massages or facials.

Some longevity-inspired trips focus on treatments, while others focus more on social and lifestyle changes. This includes programs that promise to teach travellers the secrets of centenarians .

Mark Blaskovich, 66 years old, spent $4,500 on a five-night trip last year centred on lessons from the world’s “Blue Zones,” places including Sardinia, Italy, and Okinawa, Japan, where a high number of people live for at least 100 years. Blaskovich says he wanted to get on a healthier path as he started to feel the effects of ageing.

He chose a retreat at Modern Elder Academy in Mexico, where he attended workshops detailing the power of supportive relationships, embracing a plant-based diet and incorporating natural movement into his daily life.

“I’ve been interested in longevity and trying to figure out how to live longer and live healthier,” says Blaskovich.

Vitamins and ozone

When Christy Menzies noticed nurses behind a curtained-off area at the Four Seasons Resort Maui in Hawaii on a family vacation in 2022, she assumed it might be Covid-19 testing. They were actually injecting guests with vitamin B12.

Menzies, 40, who runs a travel agency, escaped to the longevity clinic between trips to the beach, pool and kids’ club, where she reclined in a leather chair, and received a 30-minute vitamin IV infusion.

“You’re making investments in your wellness, your health, your body,” says Menzies, who adds that she felt more energised afterward.

The resort has been expanding its offerings since opening a longevity centre in 2021. A multi-day treatment package including ozone therapy, stem-cell therapy and a “fountain of youth” infusion, costs $44,000. Roughly half a dozen guests have shelled out for that package since it made its debut last year, according to Pat Makozak, the resort’s senior spa director. Guests can also opt for an early-detection cancer blood test for $1,800.

The ozone therapy, which involves withdrawing blood, dissolving ozone gas into it, and reintroducing it into the body through an IV, is particularly popular, says Makozak. The procedure is typically administered by a registered nurse, takes upward of an hour and costs $1,200.

Longevity vacationers are helping to fuel the global wellness tourism market, which is expected to surpass $1 trillion in 2024, up from $439 billion in 2012, according to the nonprofit Global Wellness Institute. About 13% of U.S. travellers took part in spa or wellness activities while traveling in the past 12 months, according to a 2023 survey from market-research group Phocuswright.

Canyon Ranch, which has multiple wellness resorts across the country, earlier this year introduced a five-night “Longevity Life” program, starting at $6,750, that includes health-span coaching, bone-density scans and longevity-focused sessions on spirituality and nutrition.

The idea is that people will return for an evaluation regularly to monitor progress, says Mark Kovacs, the vice president of health and performance.

What doctors say

Doctors preach caution, noting many of these treatments are unlikely to have been approved by the Food and Drug Administration, producing a placebo effect at best and carrying the potential for harm at worst. Procedures that involve puncturing the skin, such as ozone therapy or an IV drip, risk possible infection, contamination and drug interactions.

“Right now there isn’t a single proven treatment that would prolong the life of someone who’s already healthy,” says Dr. Mark Loafman, a family-medicine doctor in Chicago. “If it sounds too good to be true, it probably is.”

Some studies on certain noninvasive wellness treatments, like saunas or cold plunges , do suggest they may help people feel less stressed, or provide some temporary pain relief or sleep improvement.

Linda True, a policy analyst in San Francisco, spent a day at RAKxa, a wellness retreat on a visit to family in Thailand in February. True, 46, declined the more medical-sounding offerings, like an IV drip, and opted for a traditional style of Thai massage that involved fire and is touted as a “detoxification therapy.”

“People want to spend money on things that they feel might be doing good,” says Dr. Tamsin Lewis, medical adviser at RoseBar Longevity at Six Senses Ibiza, a longevity club that opened last year, whose menu includes offerings such as cryotherapy, infrared sauna and a “Longevity Boost” IV.

RoseBar says there is good evidence that reducing stress contributes to longevity, and Lewis says she doesn’t offer false promises about treatments’ efficacy . Kovacs says Canyon Ranch uses the latest science and personal data to help make evidence-based recommendations.

Jaclyn Sienna India owns a membership-based, ultra luxury travel company that serves people whose net worth exceeds $100 million, many of whom give priority to longevity, she says. She has planned trips for clients to Blue Zones, where there are a large number of centenarians. On one in February, her company arranged a $250,000 weeklong stay for a family of three to Okinawa that included daily meditation, therapeutic massages and cooking classes, she says.

India says keeping up with a longevity-focused lifestyle requires more than one treatment and is cost-prohibitive for most people.

Doctors say travellers may be more likely to glean health benefits from focusing on a common vacation goal : just relaxing.

Dr. Karen Studer, a physician and assistant professor of preventive medicine at Loma Linda University Health says lowering your stress levels is linked to myriad short- and long-term health benefits.

“It may be what you’re getting from these expensive treatments is just a natural effect of going on vacation, decreasing stress, eating better and exercising more.”

Which Investments Do Best—and Worst—in a Recession

The latest trend in wellness travel is somewhere between a spa trip and a doctor’s appointment

Vitamins and ozone

What doctors say