When recession hits, take a fresh look at your portfolio and make strategic moves promptly so you can minimize damage now and in the future. Eventually, you can pull through a recession and change your strategies once again, as needed.

During a recession: 

                   1) Look at your portfolio and reallocate and diversify if needed. Some things to consider include:

- Are you invested heavily in equities? It might pay to reallocate some of your investments to less risky holdings such as certificates of deposit or money market accounts.

- In what sectors are you invested? If you are invested in a sector that has taken a hit in the recessionary economy, such as home construction, consider moving some of your investments into sectors that do better during recessionary times. These might include sectors that cover essential staples, such as food or utilities, or medical sectors.

- If you need to diversify your holdings, consider investing in an index fund (find details at http://www.sec.gov/answers/indexf.htm) or exchange traded fund (details at http://www.sec.gov/answers/etf.htm).

- Are you close to retirement? If you are able to retire when you had originally planned, make sure your holdings are in less risky investments, such as municipal bonds and  FDIC insured certificates of deposit.

2) Avoid putting your portfolio completely in cash investments if you are a long way from retirement. Many financial advisors make this recommendation, however, each person has his or her own tolerance level for risk. 

3) Avoid panicking. Do not let your emotional state cause you to make investment decisions you may regret later. Instead, arm yourself with facts. Three good sources of broad financial information for the personal investor are www.cnnmoney.com,  www.kiplinger.com, and www.e-personalfinance.com.  

4) Avoid selling low. It is tempting to pull equities when the market is tanking. Resist this temptation, which could cause you to lose even more money. Be patient and wait it out.