Recession Survival Guide: Learn Which Industries Beat Every Recession
Not all stocks sink in a downturn. Utilities rose while tech tanked in ’01. Here’s how to pick the lifeboats that'll save you in the next economic storm.
Macro Map — The Grid Every Recession Investor Should Know
Think of the equity universe as a chessboard split along two axes:
Cyclical ↔ Defensive
Interest-rate Sensitive ↔ Insensitive
Economic sensitivity is the degree to which a sector’s revenues and margins correlate with real GDP growth and consumer confidence. Utilities score low (elasticity ≈ 0.3), while Industrials and Consumer Discretionary often exceed 1.0.
Three Ways to Spot a Lifeboat (with Real ETFs)
Using all lenses forms a confirmation triangle—when macro, micro, and price-action all agree, sector rotation conviction skyrockets.
Data Dive — Who Won and Lost in the Last Three U.S. Recessions?
Key pattern: sectors tied to necessity (power, food, basic health) or to indispensable infrastructure of the moment (cloud & e-commerce in 2020) routinely outrun the index when GDP turns negative.
Why Some Industries Float While Others Sink
Demand Inelasticity — Consumers keep lights on and buy medicine regardless of layoffs.
Regulated Revenue — Utilities earn allowed returns set by Public Utility Commissions, limiting downside.
Balance-Sheet Buffers — Staples and Health Care carry lower leverage, reducing refinancing risk when credit spreads blow out.
Pricing Power — Brands like Procter & Gamble can pass through inflation, protecting margins.
Capital Cyclicality — Energy and Industrials often embark on cap-ex binges after good times, which collide head-on with recessions.
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