Recession-Proof Your Portfolio

The reason to choose this fund is that, unlike the other new commodity products, DJP has a heavier weight to agricultural commodities like corn, wheat and live cattle. Foodstuffs are more resistant to cycles than things like copper and oil. Economic slowdowns could create a drag on demand for industrial commodities, and although DJP does have 29% exposure to the energy complex, it also has 36% in the softer commodities.

Biotech Relief

Here's one last idea you may not expect because the beta is high and there is no yield: Genentech(DNA), or even Amgen(AMGN).

Good news from a biotech company, regardless of what is going on in the economy or the world, will lift the stock. I mention DNA and AMGN because both names' betas, at 0.470 and 0.502, respectively, have a low correlation to the market. A couple of other examples are Applied Biosystems(ABI) and Millennium Pharmaceuticals(MLNM).

Unfortunately, the biotech ETFs are highly correlated to the market; the above names are exceptions, but in a volatile world, there is a lot of risk with an individual stock. There are no shortcuts in picking a stock from this part of the market, but good news will lift these names a lot, even in an ugly market.

What I hope you take from this are the themes, as opposed to the specifics. No doubt there are other slices of the market that will also be relatively resistant to recession. These should be explored.

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