 Good day, fellow investors. Yesterday, I discussed how a recession is closed. However, nobody knows when it will come. Will it be tomorrow, in the next year, five years? Will it be a smaller recession? Will it be a big recession? That's impossible to know. What we can do is to adjust our portfolio to what works well in the late part of the economic cycle. And we are going to discuss investments today that are such investments that usually outperform the market in the late part of the economic cycle going into a recession. If there is a small recession, you could really, really benefit from such investments. So the first thing to look at is quality and stability business modes. Just think, if a recession comes, am I still going to turn on the light? Yes. Am I still going to eat? Yes. Are people still going to use the medications? Unfortunately, yes. So such companies, if they are cheap, if they have a good dividend and they will continue to pay the dividend through a recession, you're still going to brush your teeth, such companies are good investments in the late part of the economic cycle. If we take a look here, in the late part of the economic cycles, energy, healthcare, materials, consumer staples, utility, usually outperform real estate, financial, industrial, telecom, information technology, and other consumer discretionary stocks. Energy usually also outperforms in such a period, but then drops extremely low in a recession, because in the late part of the economic cycle, inflation starts to kick in, energy prices go up, and that's a benefit for energy stocks. However, when there is a recession, demand falls, industrial demand falls, and then they really crash, so be careful there. Then there are other secular trends that will develop, will grow no matter what happens in the economy. Those are the development of electric vehicles, the growth of the middle class in the world, 5G data, autonomous drive, growth in India, growth in emerging markets. So those things cannot be avoided. People are going to eat more in the whole world, fertilizer, so those trends are there, no matter what happens in the economy. Therefore, you really want to expose yourself to such invest, but you shouldn't overpay for such investments. Really look at the earnings, really look at the fundamentals, look at what happened in 2009, with the stock or with the company. If the company was stable, continue to pay a dividend, head free cash flows, look at the price to book value, and look at tangible book value. The price is what you pay, the book value is what's on the balance sheet. It can be tangible, real estate, cash, or it can be intangible, goodwill. Usually in a recession, goodwill is impaired if they overpaid for an acquisition, so really look for companies that are trading close to book value, because in a recession, earnings get lower or go to zero or negative, so the only thing that can protect the stock price is the tangible book value. So really be careful in choosing your picks for the next recession. The second thing to do is start to take advantage of higher interest rates. We have seen the Fed slowly increasing its interest rate, which means that also treasuries are yielding more money. If you want to be protected, if you want to have liquidity, buying short-term treasuries will give you 1%. Okay, not much, but when the next crisis comes, you will be able to buy those information technology stocks that consumer discretionary stocks at extremely low prices. So having a liquidity caution that still yields 1% is really something to think about now. The first thing to do is to increase your exposure to hedges. Those could be put options if you know what you're doing and because buying them now should not be that expensive in relation to the downside. However, I prefer gold as a hedge and especially gold miners, which should do very good if we see inflation and economic and financial turmoil. That's highly possible with the huge amount of debt the developed world has and the huge amount of money that has been printed into the environment. Now, what I just said sounds very, very easy. Simple strategy has worked in the past, will probably work in the future. The problem is that we are not going to do it. Most people are not going to rebalance their portfolio now and this is why. The answer is greed. If you invested in Nvidia in the last year, you would be up 170%. Alibaba 66%. Win resorts 42%. If you go into defensive stocks, your returns will be much lower than those in the chart. If you go into the hedges and the economy continues to grow, your returns will be negative. So even if we could lower the risk by diversifying, by protecting, by hedging, many investors prefer to stay with the aggressive portfolio looking for those hot stocks that have really the potential to grow. However, those stocks usually get burned in the recession. So it's decision, see where you are in your life, what's your risk appetite, do you need more protection or do you need more aggressiveness and you want to see what happens. If nothing happens, you will still continue with your lifestyle. So really think about where you are in this part of the economic cycle. That's even perhaps the most important thing. Where you are, where we are, where I am as a person, then what to do with your portfolio. Then it will be much easier. The good question to ask yourself is, what would I do if the S&P 500 falls 10% in the next month? If it falls 30% in the next two months and everybody is saying, okay, this is the bottom, we will recover the Fed is printing money and then it falls another 50%. How would that affect your life? How would that affect your health? So really think, okay, what if the worst happens? How would that affect me and how am I positioned for the worst happening? Do I have enough defensive assets or I'm totally aggressive and just exposed to high risks? Looking forward to your comments. If you would like to write down your portfolio and percentages, of course, I would love to discuss, okay, is it aggressive? Is it very risky? Is it defensive and how it's balanced? So I'm looking forward to your comments. Hope you enjoyed the video. Click like if you enjoyed the video. Thank you for watching and I'll see you in the next video.