Diversifying across industries, asset classes and geographies can further increase the portfolio’s resilience, helping to protect your investments through economic ups and downs.

No stock portfolio is completely recession-proof, but you can still build a diversified stock portfolio aimed at withstanding economic downturns. A diversification strategy would include different asset classes, including defensive and growth-oriented stocks.

To start building a recession-resistant portfolio, prioritize companies with strong fundamentals, stable earnings and low debt levels. Companies that provide high dividends may also offer added stability, as dividend payments provide regular income and can help offset declines in stock prices.

Companies with a history of solid performance during past recessions may be worth considering, too, as they have demonstrated resilience in difficult economic conditions.

Maintaining a balance between defensive and growth-oriented stocks is also important. Defensive stocks provide stability, while growth stocks, particularly those with strong market positions and sustainable demand, may still offer returns even in downturns. Here are some investments to consider when creating a portfolio.

When building a recession-resistant portfolio, focusing on historically resilient sectors can provide added stability. Here are some sectors to consider, along with examples of top stocks:

• Healthcare: Healthcare is a defensive sector as people continue to require medical services regardless of the economy. Leading stocks like Pfizer tend to hold their value during recessions because of their diverse product portfolios and essential services.

• Utilities: Utility companies provide essential services like electricity, water and gas, which remain in demand in any economic climate. Stocks such as Duke Energy and NextEra Energy are popular choices for recession-resistant portfolios, offering stability through consistent revenue and often high dividends.

• Consumer staples: Companies that produce essential household goods, such as food, beverages and personal care items, tend to perform well during economic downturns. Procter & Gamble and Coca-Cola are examples of consumer staples stocks that generally remain stable even when consumers cut back on discretionary spending.

• Telecommunications: Telecommunication services, including companies like Verizon and AT&T, can be resilient during recessions, as individuals and businesses continue to rely on communication services despite economic conditions. Telecom stocks often provide reliable income through dividends.

In addition to stocks, there are other types of investments that can help create a recession-resistant portfolio. Here are some alternative investments to consider:

• Precious metals: Precious metals like gold and silver are often viewed as safe-haven assets during recessions. They tend to hold their value when stocks decline, providing a hedge against market volatility.

• Real estate: Although real estate may not perform well during recessions, it can offer opportunities for investors who are prepared to buy properties at lower prices. Real estate values typically recover as the economy rebounds, making it a valuable long-term investment. However, it’s wise to have cash on hand to take advantage of lower prices during a downturn.

• Government bonds: U.S. Treasury bonds and other government bonds are typically seen as safe investments during recessions. They provide fixed returns and are backed by the government, making them a low-risk addition to a portfolio focused on preserving wealth during economic uncertainty.

Building a recession-proof stock portfolio involves selecting investments that are more likely to hold their value during economic downturns. By focusing on defensive sectors, diversifying your holdings and considering alternative investments, investors can create a more resilient portfolio that balances stability with growth potential. While no portfolio can be entirely immune to a recession, taking these steps can help minimize risk and better protect your wealth through periods of economic uncertainty.

• A financial advisor can help you mitigate risk for your portfolio. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

• If you want to diversify your portfolio, here’s a roundup of 13 investments to consider.

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