How to Trade During a Recession: Strategies & Safe Havens (2026)
Fundamentals & Economics · 12 min · Published 2026-03-28
Learn recession trading strategies. Covers safe havens, short selling, defensive stocks, and portfolio protection. Free guide at Tradyom.
Trading during a recession requires shifting to defensive strategies: safe-haven assets (gold, US Treasuries, CHF, JPY), defensive sectors (utilities, healthcare, consumer staples), short selling overvalued growth stocks, and reducing overall position sizes. Cash is also a position.
Frequently Asked Questions
Should I sell everything in a recession?
No — panic selling locks in losses. Instead, rotate into defensive positions gradually as recession signals emerge. Keep 20-40% cash for buying opportunities. The best buying opportunities often occur during recessions.
How long do recessions typically last?
US recessions average 11 months. Markets typically bottom 6-9 months before the recession officially ends. This means the best time to buy is while economic data still looks bad — markets are forward-looking.