What exactly is a recession and how does it affect stocks?

A recession is a period when a country's economic output shrinks. You'll notice more people losing jobs and businesses cutting back or closing down. During recessions, stock prices often fall as company revenues and profits decline. However, certain companies—like those in this collection—tend to maintain more stable performance because they provide essential products and services people need regardless of economic conditions.

Why do some stocks perform better during recessions?

Recession-proof stocks typically belong to industries that provide essential goods and services that people need regardless of economic conditions. Companies in sectors like discount retail, groceries, utilities, healthcare, and consumer staples often maintain steady demand even when consumers cut back on other spending. These businesses generally have stable cash flows, lower debt levels, and business models that can withstand economic pressure.

What makes these specific stocks "Recession Proofers"?

The stocks in this collection have demonstrated resilience during past economic downturns. They share characteristics like robust business models, diversified revenue streams, and the ability to adapt to changing market conditions. Companies like Procter & Gamble (PG), Coca-Cola (KO), and others in this group offer products people continue to buy even when tightening their budgets, which helps maintain their performance when other stocks struggle.

How can recession-resistant stocks benefit my investment portfolio?

Including recession-resistant stocks in your portfolio can provide stability during market volatility. When economic conditions worsen and many stocks decline, these companies typically experience less dramatic drops or may even continue growing. They can act as a safety net, potentially preserving wealth during downturns while providing steady returns over time. For long-term investors, this stability can be just as valuable as growth potential.

11 handpicked stocks

Top Stocks for Recessions

These carefully selected stocks have shown remarkable resilience during economic downturns. Our team of professional analysts has identified companies that maintain stability when markets get shaky, giving you options for weathering financial storms.

Han Tan | Market Analyst

Updated 1 day ago | Published at May 3