KEVIN O'LEARY: Here are the REAL recession indicators. They're convincing me... it's time to act!

The chief economist of the financial analysis company Moody Analytics warned on Wednesday that the chances of a recession in the US are 'uncomfortably high' and 'rising,' bolstering one of my long-held beliefs: I don't care what economists think.

Don't get me wrong. I respect the profession. It is certainly valuable to understand how supply and demand, and interest rates work. But the personal opinions of economists are mostly worthless.

Like stock pundits, they're asked to time the markets and predict when any economy is going to plunge into recession. But they're wrong over 90 percent of the time. In fact, graveyards are full of the bones of people who've tried to forecast downturns.

No one can do it. Some still try.

I'll only ever make one guaranteed prediction: there is a 100 percent chance that there will be another global recession. It's just that no one can tell you when it will happen.

I'm watching the same market indicators that are driving the likes of Moody's Mark Zandi into hysterics and hearing the same nattering on Wall Street, but I'm putting money into the market – not taking it out.

Here's what I am monitoring:

Follow the (borrowed) money

More Americans than ever before are tapping into their 401(k)s to cover financial emergencies. Nearly five percent of account holders made early withdrawals in 2024 to pay for medical bills or avoid foreclosures, up from 3.6 percent in 2023, according to Vanguard Group.

A record percentage of subprime auto loan borrowers are falling behind on their payments, the highest rate since 1994, says the credit rating agency Fitch. And consumer confidence, in some surveys, is falling to decades' lows.

Taken together, those indicators may seem concerning. But all of them are a result of interest rates moving from four to seven percent for most consumer loans and credit card rates inching up around 20 percent.

These borrowing rates are the result of 'sticky' inflation that skyrocketed under the previous administration and have not yet come down.

Many consumers were anticipating that the Federal Reserve was going to cut rates in 2025 but I don't anticipate that happening anymore. Until the Fed sees what they impact of new tariffs may be they'll likely keep rates where they are.

So now Americans are coming to grips with this 'new normal' high-interest rate environment, and they are adjusting according.

Is it an indicator of recession? I don't believe so. Instead, I am closely following a more practical metric that points in the opposite direction.

America's small business backbone

I hold equity in at least 50 companies across all 11 sectors of the US economy. These businesses are involved in everything from insecticide to wireless charging and commercial airline kitchens to kitchen utensils. And I don't see any slowdown in demand.

I speak to the CEOs of these companies nearly every single day.

Right now, in March, many of them are planning ahead for October and the start of the holiday buying season. They're making critical decisions about how much capital they're going to invest to meet consumer demand.

They need to invest now in their inventories so that they can ship to their retailers and fill online orders.

If they saw a recession on the horizon, they'd be pulling back on capital expenditures by up to 20 percent. But that's not happening.

I didn't see a weakening in business investments last week. I haven't seen it this week.

These small businesses are critical to the health of the US economy, as companies of between five and 500 employees create more than 60 percent of the jobs in the country.

From my perspective, they are not planning for recession.

So, what about all the volatility in the stock markets? I'm not particularly concerned about that either.

I see a buying opportunity.

Embrace the volatility

The US stock market closed slightly higher on Friday breaking four straight weeks of losses. But Wall Street remains rife with uncertainty.

As I've written for the Daily Mail that's certainly no surprise to me.

President Donald Trump came into office like a bull in china shop. He knows that he has only two years of guaranteed political control of Washington, DC (before the midterm elections) and he is determined to jam each one of his agenda items through.

But beside the blistering speed of the Trump White House, its radical transparency has been stunning to people.

Take Trump's public Oval Office negotiations with Ukraine's Volodymyr Zelenskyy last month, for instance. What Trump did by allowing the talks to play out in front of the public has never been done before in modern day negotiations.

The world was in shock. And the president is conducting his trade wars in much the same way. No one likes to see the sausage made. It makes some nervous and that creates incredible volatility in the markets.

But times of volatility are immensely good for investors who are willing to take positions in times of turmoil. I've seen this movie before, multiple times in my investment career, it creates opportunity.

While I never try to predict the 'bottom' of a market correction, I do see each 'dip' as an entry point into the market. Right now, I am a buyer of indices that are conservative in nature.

Some track small capitalization firms in the US, others follow Asian or European industries. But I never pick specific stocks.

That's how I invest - consistently and without attempting to time the market. Over decades, I've learned these moments of volatility are very interesting times to take positions.

Again and again in these tumultuous Trump times, I return to the same advice for investors: Pay close attention to the president's 'signals' and ignore the 'noise.'

Doom and gloom predictions from economists like Mark Zandi as the 'noise.' He can't predict the likelihood of a recession better than you or I could.

Instead, watch Trump's 'signals.' The President wants to renegotiate America's trade deals with the ultimate goal of rallying the West to create a more efficient economic engine to take on rising challenges from China and its partners, Russia and North Korea.

That's a vision that I'll invest in.