 So I get this question a lot, should you sell your stocks before a recession or let me better phrase that, should you sell your stocks before you think there is a recession because no one knows exactly when a recession is going to occur and what is a recession guys? The technical definition of a recession is two consecutive quarters of negative GDP growth domestic product growth in a particular economy. So should you sell your stock before you think there is a recession and typically there's a recession every five to 10 years and for those of you guys that can do math the last recession we had is 2008-2009 and right now it's 2019 so we're getting to that point where historically we could potentially see a recession so let's talk about that in today's video. So typically guys during a recession the entire stock market does very poorly and this is because people start to panic, people start to sell out of their assets, they're selling their stocks which is causing the stock prices and individual companies to go down which leads the indexes, the S&P 500, the NASDAQ, the Dow, the Russell all of these indices they end up going down in price causing a quote-unquote bear market. Now as a bear market always constituted through a recession no we can have a bear market when there isn't a recession like this past month guys, past couple of months in October through December that was technically a bear market because the NASDAQ I believe went down about 20% right and we categorize a bear market when index the S&P the NASDAQ or the Dow Jones goes down 20% from its peak and we saw that in the NASDAQ you know the S&P and the Dow they were almost there about 18-19% but we didn't have a quote-unquote recession so the first thing I want to get out in this video we don't necessarily need a recession for a bear market but when we do get a recession guys you know we do get a bear market most likely we will get a bear market right so what should you do in this case let's get into it so let's say you bought five companies you know two years ago right let's say you bought Apple let's say you bought Facebook let's say you bought Johnson and Johnson Coca-Cola and let's say you know Procter and Gamble right you have three value companies there that are income producing assets they pay dividends well actually four because Apple is one as well and then you have a growth company like Facebook that has a lot of cash they have a lot of assets and a lower amount of debt on their balance sheet right and let's say we hit a recession and those stocks they lose 30% 40% of their value so instead of just panicking selling out of those positions at massive losses right taking those huge losses losing a ton a ton of money you can add more money into those positions be scared don't be scared when the stock market goes down guys buy when others are fearful I know you guys have heard that quote and in turn you'll prosper over the long run this is if you did pick a quality company that has assets and cash that will allow them to prosper through difficult times right if you have a company like let's say you know a speculative company that's unprofitable that's different right because this company may not have the resources to get through a recession and they might go out of business right let's say a company that that doesn't have money what are they gonna do when you know everyone's selling everyone's selling there's not a lot of money out there in the economy they're going to crumble right this is why it's super important to pick good assets that in my opinion are profitable I only invest in companies that are profitable that have a lot of cash that can get through a recession right and historically guys just take a look at this the S&P 500 was 600 points back in their recession in 2008 and 2009 and what is it right now it's 2820 points at the time that I'm recording this video on Friday March 15th that is a 4 plus you know 4x increase the people that sold during that recession are 100% kicking themselves in the butt right now because if they were to double down on some income producing assets some assets that they think will do great in the future they would have made so much money right now it's unbelievable and this is the philosophy that I'm taking in the next recession sure my portfolio right now doesn't really consist of many speculative companies right I'm more of a value investor I like income producing assets which allows me to feel more confident to buy more stocks at the dip the next time that we do get a recession sure my portfolio is going to be down I'm going to be holding through some pain but I know in five 10 years as long as I pick good assets which in my opinion my portfolio does consist of good assets I'm going to come ahead in five to ten years and hopefully two three x my portfolio my assets in the companies that I do invest in and of course I'm going to be getting income I'm going to be getting dividends through the recession because the companies I do pick they historically do well during their recession they still pay out their dividends although their share prices may not be doing so well so you know the moral of the story is guys should you sell during a recession or when you think there's going to be a recession no because no one can time the market and historically the market has gone up after every single recession so I personally think again do your own research if you want to try and time the market go ahead but I think you should double down buy more solid assets that have good balance sheets good cash flow all of that at a discounted price and Warren Buffett put this in a perfect perspective perfect example in his CNBC interview a couple of weeks ago I forget exactly what he said but he used an analogy of a hamburger right let's say a McDonald's hamburger is a dollar and the next two weeks it goes down to 20 cents wouldn't you be like oh my god that's an awesome awesome deal I want to buy more and more hamburgers right that's what you would think but some people for some reason people don't view the same thing you know for stocks right a stock price let's say is one dollar next five weeks it goes down to 20 cents although that business is still the same strength that has the same assets you know the same you know balance sheet cash all these different things to get it through the recession at a cheaper price people panic and they don't want to buy at a cheaper price but it just doesn't make sense right if a stock price is going down but the business itself is still fundamentally strong that is a deal you should be buying that stock and that's the moral of the story today guys don't be scared to double down on your strong income producing assets your strong growth businesses that have a lot of cash during hard times because historically you're going to come out ahead if you do pick strong businesses so I hope you guys enjoyed this video if you did feel free to hit that like button drop a comment and subscribe to the channel if you're new let me know down below what do you guys think about this are you're going to be selling your stocks when you think there's going to be a recession are you going to try and time the market or are you just going to hold through the tough times maybe play some put options maybe short some stocks you know hedge against your position so you can make some money on the downside and then buy at the bottom what are you going to do guys I would love to know I'll catch you all in the next video thanks again for watching peace out