How Private Equity Can Teach You to Resist Recessions

Private equity (PE) investments aren't listed on public markets. With money pooled from institutional and individual investors, PE groups buy into companies they want to fix up and flip – hopefully for a hefty profit. Since this investment class became popular in the 1970s and 1980s, PE's patient, long-term approach to investing has typically outperformed other sectors during a downturn, posting some of its best returns after a recession. Here's how acting more like private equity can help you ride out the market's rocky patches.

Private equity firms abide by a long-term investment strategy, averaging around five years. They keep investing during turbulent times, quickly doing enough due diligence (will this company add value?) to act on the kind of short-term buying opportunities that economic lows create. By steadily buying when other investors stay away, PE gets to acquire promising assets at a deeper discount.

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Source Fool.com