Is it even possible to recession-proof a portfolio? You can certainly take steps to soften the blow of a recession. This article by Jonathan Burton titled Five Ways to Recession-Proof Your Portfolio offers some things to think about:
1. Think big, buy quality – the bigger a company is, the more resources they have to fight a recession. This DOES NOT MEAN that they won’t lose money or that the share price won’t go down. However, a bigger company can most likely weather a recession better than a smaller company.
2. Think consumer staples – the economy could go to hell in a handbasket but people still need toothpaste, toilet paper, food and beer to forget it all.
3. Think healthcare – no matter how bad the economy, people still get sick and need healthcare.
4. Think about taking it to the bank – yields on CDs and even money market accounts are now over 4% and some are even over 5%, which isn’t a bad yeild.
5. Think international – as the article mentions, be careful to avoid export-driven economies like Asia and Latin America, which depend a lot of the economy of the U. S.
Interesting article. Fortunately for me, I’m far enough away from retirement that I don’t really need to worry about a recession.