What stock is recession-proof?

The global stock market is not performing very well and investors may start to think about picking recession-proof stocks to reduce their risk and generate some returns from their investment even during bad time. What characteristics might a stock have to make it recession-proof.

A stock should be able to generate constant returns despite the environment or have a negative correlation between its performance and the environmental performance.If we think carefully, we can find some companies which can actually perform better when the economy is generally not performing very well. One example is fast food chains. When an economy is performing well, people are generally earning higher incomes, so they can afford more expensive choices, such as fancy restaurants; however, when the economy is not performing well, people do not earn as much as they do during good time, sometimes they may still need to have meals outside because of various reasons, when fancy restaurants are too expensive, they may go to fast food chains. In addition, mobile network providers may not be affected by the economic performance, since people are now much more dependent of smartphones and they will not give up their smartphones even when the economy is not doing well. Moreover, they may even use smartphones more often. First, they may start to pay more attention to news. Secondly, they may choose their smartphones as their primary entertainment choices, since other choices may become less afordable. Thirdly, many users are on contracts, even if they want to lower their spending on mobile network, they are not able to do so.

Overall, there are recession-proof stocks definitely out there.