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5 Simple Ways to Recession-Proof Your Investment Portfolio

Consider these five tips to recession-proof your portfolio.


When considering your investment portfolio, it’s important to make sure that you have options that are considered to be recession-proof. Entrepreneurs should seek to be economically resistant to the outcomes of a recession by developing a diverse portfolio.

Consider these five tips to recession-proof your portfolio.

 

  1. Invest in Strong Companies

    During stable periods, it’s smart to invest in startups and smaller companies. However, during a recession, it’s important to make sure that a number of your investments are in stable companies. These are companies that have been around for a long time, and are likely to continue through the recession. This will help make sure that you’re not losing money in the long-run.

  2. Invest in Commodities

    Another place you will want to diversify when investing during a recession is in the commodity markets. Because commodities are most often used as inputs in the production of other goods or services, these markets will always be around. Both companies and governments will continue to need resources that commodities represent. Even if the return is not what it is in better times, commodity investments are a strong option during a recession. If it is believed that a recession is imminent, commodity prices are driven down, making them cheaper to buy. Keep hold of them through rough times, and they’ll likely give you a great return.

  3. Invest in Knowledge and Technology

    When you’re investing during a recession it is important to have someone help you. Don’t try to tread troubled waters yourself. An investment firm can help you understand good and bad investments, and where you should put your money. This will help you make sound financial decisions. Choosing the right investment firm can come as easy as browsing the web on your tablet or PC. Make sure to use technology to your advantage.

  4. Invest in Real Estate

    Many people shy away from real estate during a recession. It is seen as a bad investment, because fewer people are buying. However, if you’re investing for the long-term, real estate is a good option. With these investments, you can buy homes at low prices, and after riding out the recession, the sale price can soar far above your initial purchase. Even if you put time and money into renovations, you’re likely to sell for more than you put into the home post recession.

  5. Invest in the Long Term

    The most important thing to keep in mind during a recession is that you should not focus on the short-term. Smart investors make long-term investments during hard times. Many long-term investments will ride out a recession, allowing you to recover your money and make a profit when things stabilize. Eventually, recessions will end, and things will get back to normal. You simply need to make sure that your investments make it that far. When you are putting together an investment portfolio, it’s important to keep in mind what is happening in the country and in the world. This will help you create the best portfolio.

 

Teddy Hunt is a freelance content writer with a focus on technology. When not behind a computer, Teddy spends the majority of his free time outdoors and resides in Tampa, Florida.

 

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