FAQ: How to Build a Recession-Proof Portfolio

When investors here the term “recession”, one of the first things they think about is what the impact on their own personal portfolios might be. If they’ve lived through a few recessions, they often flash to painful personal events and memories, like a plunge in the value of their 401(k) or a drop in the value of their home.

But recessions, while unpleasant, aren’t something to live in fear of. Rather, they should be prepared for in terms of portfolio construction, personal savings rates and diversification. Surviving dips in economic growth and the market reactions to these setbacks is critical.

In this edition of FAQ, Ben Carlson, Michael Batnick and Joshua Brown of Ritholtz Wealth Management discuss several key answers to the questions they get from clients, colleagues and friends about what they should be doing now – in advance of the next recession.

Let us know your ideas for the next FAQ in the comments below, and we’ll get to work on answering your questions!

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20 thoughts on “FAQ: How to Build a Recession-Proof Portfolio

  1. What do you think about a hard asset allocation or a some sort of representation. Don't want to advertise for anyone but something like the GSCI Commodity Index. Just a thought.

  2. The fact that this is the longest period of growth in history and debt is the highest in history, plus the s and p 500 has done nothing over a year means we're at or close to a top. For this reason, I'm fully in cash. When this bubble bursts your looking at a drop of around 50% to 70% in my opinion, with the low and lowering rates. Why would you risk your money for 5% to 10% maximum upturn. I think this recession will hit in 2021/22 and will be a full on depression. If you look at 1929 depression, we're in the same place. I'm ONLY coming back into stocks after atleast a 50% drop. Minimum.

  3. Good to see the production values of your videos improving-still find these huge phallic mikes distracting and the lighting needs work but you guys have an important perspective to share with young investors and that's GREAT. What I don't quite get is why you guys-especially Josh-who knows the danger and malfeasance of this #MadKing in office, don't talk more honestly about the UNIQUE headwinds here as domestic & global populism/isolationism grows in tandem with negative global interest rates , and the fact that this trade war with China is in reality-a COLD WAR that will have a dramatic impact on global growth as we head to a bi-polar trading environment ( You KNOW Xi has no motivation to deal as Trump faces his rightful fate) as the Fed is feeding the repo overnights at insane levels that forebodes something very scary we're NOT seeing and the reality of anti-trust break-ups of big tech seem very viable. My point is, investor sentiment, for those of us who actually follow real domestic and global news, matters more now than ever and historical recession recovery data may not apply quite as cleanly as in the past. Too much lol? Sorry-I just can see more and more people rightfully looking to Josh to cut through the bullshit and provide "truth in advertising" so to speak. So as I said to Scott Galloway- the power is in your words-no special effects needed. Use them courageously. Always a fan..Bonnie (BonFire&Ice).

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