Recession Resistant

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DEFINITION of 'Recession Resistant'

An entity which is not greatly affected by a recession. Recession resistance can apply to stocks, companies, businesses, jobs and even entire industries that will be needed during all economic states. For example, an item such as bread may be considered recession resistant, as people will continue to buy bread regardless of a recession.

BREAKING DOWN 'Recession Resistant'

During times of recession, portfolio diversification plays an even larger role than normal. It is wise for investors, even in times of plenty, to have a wide variety of investments included in their portfolio to insure them no matter which way the economy turns. Types of stock that will provide insurance during a recession are called recession-resistant stocks.

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RELATED FAQS
  1. What is the difference between passive and active asset management?

    Asset management utilizes two main investment strategies that can be used to generate returns: active asset management and ... Read Full Answer >>
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    The percentage of a diversified investment portfolio that should consist of large-cap stocks depends on an individual investor's ... Read Full Answer >>
  3. What types of assets lower portfolio variance?

    Assets that have a negative correlation with each other reduce portfolio variance. Variance is one measure of the volatility ... Read Full Answer >>
  4. How can I determine if my portfolio is overweight in certain sectors?

    You can determine if your portfolio is overweight in certain sectors by performing a regular review of your portfolio allocations. ... Read Full Answer >>
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