Been thinking about how most investors chase growth in bull markets, but the real skill is not losing money when things get messy. Recession proof investing isn't sexy, but it works.

Just looked at some data going back 30 years, and there's actually a clear pattern. Consumer staples companies—the stuff people buy no matter what happens—consistently outperform everything else when recessions hit. We're talking toothpaste, food, household products, medicine. Things that don't get cut from budgets even when the economy contracts. Makes sense when you think about it. Consumer spending drives almost 70% of US GDP, and people prioritize essentials.

The numbers back this up. Before and after recessions dating back to 1990, including the early 90s downturn, the dot-com crash, 2008, and COVID, consumer staples averaged 14% returns in the 12 months leading up to recessions and 10% in the 12 months after. That's solid defensive positioning.

There's actually an ETF built specifically for this—the Consumer Staples Select Sector SPDR Fund. It's been around since 1998, holds the obvious names: Walmart at over 11%, Costco around 9%, Procter & Gamble at 8%, Coca-Cola at 6.6%, Philip Morris at nearly 6%. The fund's yielding 2.71% on a trailing 12-month basis and has a solid track record of consistently paying and raising dividends for 25+ years.

Now, I'm not saying throw everything into recession resistant plays. Returns have been modest compared to growth sectors, so you'd actually lose purchasing power against inflation if that's all you held. But as a portfolio hedge? Makes sense to allocate some capital here, especially if you're uncomfortable with how concentrated the market is right now around mega-cap AI stocks and the Magnificent Seven.

The smart move is probably balance. Keep your growth exposure but park a portion in something defensive like this. As you get closer to retirement, shift more into these recession proof positions. It's not thrilling, but it keeps you sleeping at night and protects what you've built. That matters more than people admit.