A well-diversified portfolio that aligns with your investing goals and time horizon should be able to weather any economic cycle in the long run. Make sure you’re diversified across different sectors, geographic locations, and companies of varying sizes. You could also take a closer look at industries that are in demand under any market cycle. These include consumer staples, utilities, and health care. An index fund or exchange-traded fund (ETF) that tracks these industries could give you exposure without the need to individually analyze and pick different stocks in those sectors.42:T513,These days, you can still find high-yield savings accounts that pay around 5 percent annual percentage yield (APY). That dwarfs the national savings account average of 0.41 percent. You could also seek money market accounts. These tend to pay higher interest rates than traditional savings accounts but could be more liquid as they are generally tied to debit cards. The important point here is to shop around for the highest-yield savings option with little to no fees. In addition, you could also consider short-term certificates of deposit (CDs) and generally safer securities such as money market funds.

The Bottom Line

Recent economic turmoil has pushed some analysts to project a recession sometime this year. Recessions are often associated with GDP decline, unemployment increases, slowing business development, and market downturns. But there are ways you can defend your portfolio from a recession. Avoid panic selling and maintain a well-diversified portfolio that aligns with your unique goals. But more importantly, make sure you build an emergency fund that could weather the storm.47:{"termId":225711,"name":"Javier Simon","slug":"javier-simon","avatar":"https://www.theepochtimes.com/assets/uploads/2024/12/05/id5771345-J

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