What Makes a Stock Recession-Proof?
As many financial experts and CEOs forecast a full-blown economic downturn in the not-too-distant future, spurred by tighter monetary policy from central banks, I think it's a good idea for investors to find ways to protect their portfolios in this type of potential scenario. This will provide much-needed peace of mind in tough times.
With that being said, stocks and companies that are recession-proof have one important characteristic in common that investors should know. Let's take a closer look at an apt example to provide more clarity.
I believe the No. 1 sign of a stock that is recession-proof is that demand for the products and services that the business sells remains strong in an adverse economic situation. From a customer's perspective, this means they simply cannot go without the items that the company offers no matter what the economy is doing. In fact, demand stays stable or might even increase.
Source Fool.com
