[ad_1] Recession-proof stocks – is there even such a thing? In an absolute sense, the general answer is no. Recessions are an economy in decline, resulting in lower revenues and profits for most companies. That commonly translates into a flat (at best) or declining stock market. Green Recession Ahead Road sign on Cloud Background. Does that mean you, as an investor, are doomed to lose money in your portfolio during a recession? Not necessarily. While there certainly are no stocks that are guaranteed to continue rising during a recession, there are some that have a history of at least holding their own even in the worst economies. And just as is the case in booming markets, it’s often better to go with certain investment sectors than on individual stocks. #ap38-ww{padding-top:20px;position:relative;text-align:center;font-size:12px;font-family:Archivo, sans-serif}#ap38-ww #ap38-ww-indicator{text-align:right;color:#4a4a4a}#ap38-ww #ap38-ww-indicator-wrapper{display:inline-flex;align-items:center;justify-content:flex-end;margin-bottom:8px}#ap38-ww #ap38-ww-indicator-wrapper:hover #ap38-ww-text{display:block}#ap38-ww #ap38-ww-indicator-wrapper:hover #ap38-ww-label{display:none}#ap38-ww #ap38-ww-text{margin:auto 3px auto auto}#ap38-ww #ap38-ww-label{margin-left:4px;margin-right:3px}#ap38-ww #ap38-ww-icon{margin:auto;display:inline-block;width:16px;height:16px;min-width:16px;min-height:16px;cursor:pointer}#ap38-ww #ap38-ww-icon img{vertical-align:middle;width:16px;height:16px;min-width:16px;min-height:16px}#ap38-ww #ap38-ww-text-bottom{margin:5px}#ap38-ww #ap38-ww-text{display:none}#ap38-ww #ap38-ww-icon img{text-indent:-9999px;color:transparent} Ads by Money. 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With Robinhood, you can build a balanced portfolio and trade stocks, ETFs and options as frequently as you want, commission-free. Click your state to start investing today! HawaiiAlaskaFloridaSouth CarolinaGeorgiaAlabamaNorth CarolinaTennesseeRIRhode IslandCTConnecticutMAMassachusettsMaineNHNew HampshireVTVermontNew YorkNJNew JerseyDEDelawareMDMarylandWest VirginiaOhioMichiganArizonaNevadaUtahColoradoNew MexicoSouth DakotaIowaIndianaIllinoisMinnesotaWisconsinMissouriLouisianaVirginiaDCWashington DCIdahoCaliforniaNorth DakotaWashingtonOregonMontanaWyomingNebraskaKansasOklahomaPennsylvaniaKentuckyMississippiArkansasTexas Start Investing Today Bet on the Long-term Before making any major investment shifts in anticipation of a recession, it helps to revisit your bigger picture investing goals. First and foremost, investing is a long-term process. You’re not investing for the next few quarters, or even the next couple of years. No, you’re Investing for the very long-term. Your time horizon should be anywhere from several years to several decades. That means recognizing recessions as more of a bump along the road than the signal to change direction. There’s little doubt recessions – and the stock market declines they often bring – can cause declines, sometimes even steep ones. But this is when it becomes absolutely critical to remember the benefits of long-term investing. Based on the S&P 500, the stock market has returned an average of about 10.5% per year between 1926 and the end of 2021. No other investment can compete with those returns over nearly 100 years. The stock market has always been about betting on the averages, and that’s a long-term play. 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Get Started Adjust – But Don’t Gut – Your Portfolio With that said, recessions and stock market downturns are nonetheless an excellent opportunity to change the lineup in your portfolio. That doesn’t mean liquidating your entire portfolio and going to cash (if you do, you just might miss the rich returns when the next bull market launches!). Instead, make adjustments favoring certain sectors over others. “Consumer staples and utility sectors work well in a recession,” advises Sankar Sharma, Investing Authority and Founder of RiskRewardReturn.com. “Healthcare sector stocks, especially pharmaceuticals, low-priced retailers, and waste management companies also perform well. People need food and use utilities as they are necessities.” But Sharma also warns avoiding certain sectors that may have worked in previous recessions. “In the past tobacco stocks and alcoholic beverages were used to perform well but this time around it may be a good idea to avoid them.” At the opposite end of the spectrum, other sectors are performing especially poorly. One prominent example is technology. Though it led the way in the 12-year bull market cycle from 2009 through 2021, tech stocks have been particularly hard hit in the current downturn. Based on the NASDAQ 100 Technology Sector Index (NDXT), the tech sector has fallen nearly 31%, from 9565 at the beginning of the year, to 6628 through July 8. This compares unfavorably with the 18.19% loss in the S&P 500 over the same timeframe. That isn’t to say it’s time to abandon tech stocks wholesale. But since the sector seems to be particularly hard hit, maybe lean toward a solid strategy to reduce your tech exposure in favor of other sectors that are providing stronger performances. Overall, the goal of managing your portfolio during a recession should be to minimize losses. In that way, you’ll be preserving your capital to buy stocks at bargain basement prices as the economy begins to stabilize and the stock market starts to turn up. When that happens, it may be time to load up on tech stocks once again. Industry Sectors with a History of Resisting Recessions It’s not necessarily easy, but what matters in a recession is moving into stock sectors that are either more resilient in the face of economic downturns, or likely to benefit from the slide. At the same time, it’s important to realize no stock or sector is ever completely recession proof. There are a few sectors that fit the bill. Dollar Stores and Other Low-Cost Providers With the uncertainty recessions bring, consumers naturally seek out lower-cost alternatives. People don’t eliminate spending entirely as much as they shift spending priorities. A prime example