How to Invest $2 Million in a Recession

Here’s how I might invest $2 million in a recession as a former financial advisor and portfolio manager. If any of this is helpful, tune into my new podcast, Your Money Guide on the Side, by clicking the link in my bio.

1. Invest in T-Bills for Liquidity

First, I’d allocate $400,000 into T-bills through a fund like S-gov for liquidity and potential buying opportunities. Having cash allows you to buy low when others are still panicking.

2. Spread Across Defensive Sectors

Next, I’d put $800,000 spread across consumer staples through a fund like VDC, healthcare through a fund like XLV, and utilities through a fund like XLU. These sectors tend to stay strong even during downturns as people still buy food, pay bills, and get medical care. Alternatively, investing in a dividend ETF like VYM will keep paying dividends even if the underlying stock price depreciates.

3. Real Estate Investment

I would invest $600,000 in real estate through real estate investment trusts (REITs) like Vanguard's VNQ or other private real estate funds. Rental income typically remains steady, and real estate serves as a hedge against inflation.

4. S&P 500 for Recovery

Finally, I’d put $200,000 in the good old S&P 500 through a fund like VOO for the inevitable recovery. You don’t ever want to be left on the sidelines holding 100% risk-off assets.

These strategies can help you navigate through a recession while positioning your portfolio for long-term growth. If you found this information helpful, please like and follow, and I’ll continue sharing insights to help you reach your financial goals.

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