What are the best things to invest in to make your portfolio recession proof?

Question

Assuming there is an impending US recession in the next few years, how should I invest my money now so that I won't be affected?

CDs, commodities and foreign markets?

Answer 1

Do not worry too much about the next few years. Instead worry about the next few months. T-bills are very recession proof. In fact they are the most preferred of recession investments. Next would be long term governerment bonds, assuming the Fed cuts interest rates to zero again like they did in 2001. The Fed gets very upset about recessions. I do not know why. They actually serve a very useful purpose in shaking the deadwood out of the economy.

Long positions in equities do not do very well during recessions. Short positions do very well, especially in the high PE stocks.

There is an option available to you in the form of recession insurance on your equity portfolio. It is called purchasing puts on QQQQ. Very effective insurance. If the bottom drops out of equities, the puts will become worth very much more.

Answer 2

CD's and US Treasuries.