The U.S. central bank has a history of going too far in raising interest rates. At the end of their meeting today they will raise the rates for the sixth time. In the last 65 years there have been nine recessions and before each one the FED had either increased rates or was increasing them as the recession started.
In the last recession investors lost 50%, and true that was a deep and unusual loss, but for this reason investors should be on the watch for the next recession. Historically stock prices weaken six-to-nine months before a recession starts, so you cannot wait until it is clear that we are moving into a recession.
Watch for weakening in the Leading Economic Indicators, building permits and unemployment claims for example. The bond market will weaken before the stock market and is usually a good indicator. The problem is that these types of indicators are not always reliable.
The seeds of the next recession are planted so watch for their growth.