Recession and Investment Fundamentals

Worried about decrease in portfolio due to bad weather in market particularly in last 6 months. So would like to highlight some parameters/factors driving this scenario. Market is fully dependent upon performance of companies listed on it and there performance is linked with consumption, market is also associated with market sentiments, spending behavior, asset prices over a period of time and government policy framework. If these factors are negative then there will be a fall in market and your portfolio value will also drop.


Now what is called recession, Recession is a slowdown or a massive contraction in Economic activities. A significant fall in spending leads to a recession.

Recession word is not something new to us. In 2008 when the financial crisis was prevailing all over the world, we all have memories of that. Further, when the markets recovered that time almost all asset classes make life time high and have created a lots of wealth.

However, the period of recession have great learning opportunities and can be eradicated by high economic activities

During recession there are particularly two options

Stick to your portfolio and retain what you have invested but it do have risk of erosion of your asset value in short term,

Or you can liquidate and withdraw money out of the market.

Experts says you can even build a portfolio that is not much affected by recession but question arises are they really correct ?

Is it possible to Do so ?

Answer: It definitely is, if you have clear fundamentals and are stick to your basic plan of investments.

So what are the fundamentals you need to stick with while building your minimum risk portfolio?

Here is a brief list

Judgement of Goal

The investor needs to be clear about the ultimate goal of their investments. The goad must be derived even before starting the investment. You must be very clear regarding your short term and long term goals.

You need to be clear regarding when to withdraw your money out of market.


The portfolio must have right asset allocation of different assets & industries and it is must to prevent from overexposure of one particular industries/stocks. You might have heard “Do not put all your eggs in one basket”. As any one particular industry is not really predictable and can’t be assumed to deliver consistently. There always are fluctuations and regular ups and downs. So one asset class may cover the downs in other class. For example : In 2019 till date equities have continued to be a rough patch but Gold has made it way too far and have made a great run leading to all time high.

So one should be precise and concise to achieve portfolio objective by diversifying it.

Own Thinking

It is said by Ben Graham “The individual investor should act consistently as an investor and not as a speculator.”

The investor must know what it owns and why he owns. Don’t follow the crowd, use your own judgement and theories based on your study and experience and it will work.

Said by Warren Buffett “I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”

You have invest in a down market and get out in as upper market using your own judgement what to and when to, follow your own instinct.


Your carefully formulated investment plans and portfolios needs time to derive the desired goals and objectives. You might have heard that it requires ample of holding time to deliver optimal returns. Time is the greatest tool to grow your portfolio and wealth. Great results can be achieved with long term, disciplined & patient investing strategy and delivering successful investment outcomes.

“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” – Paul Samuelson

Keep Faith

Do believe on your knowledge and investment, Markets do change on even a single news and on real time basis but carefully planned and informed investor always win.

I would like to end by quoting a simple yet effective Quote :

 “An investment in knowledge pays the best interest.” – Benjamin Franklin

So please do you own necessary research, study and analysis before making any investment decision.

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