How to build a recession-proof portfolio
Recession is a business cycle slowdown with weak economic activity for at least six months. It generally occurs when there is a widespread drop in consumption and is typically associated with a gloomy market sentiment over an extended period. Spending cuts, drop in assets prices, overall roll back in many expansion activities are some tell-tale signs of recession.
For most of us, recession is not something new. The global financial crisis of 2008 is still fresh in the memory for many of us. However, what’s interesting to note is that the economy and markets have recovered globally. All asset classes have bounced back and made life-time highs with enormous wealth being created for investors.
Recessions, though not welcome, are periods of great learning opportunities. Even the harshest of recessions will eventually pass by and lead to higher economic activity, with resilience built-in to mitigate probable future shocks.