May will be the 71st month of economic expansion for the United States.

That seems like a long time, but it’s not abnormal. The last three expansions lasted an average of 95 months, with the longest lasting 10 years.

Using this recent history as a guide, we can reasonably guess how far away we might be from the next recession (about two years). But we have no way of knowing for sure.

Not even economists know when we’ll transition from one phase into the next. In fact, economists generally don’t know that we’re even in a recession until six-to-12 months after it begins. The same is true when a recession ends.

Knowing that we’re most likely nearing a later stage of our expansion, my focus has turned to what comes next.

#-ad_banner-#More specifically, I want to know whether the companies I’m investing in are prepared for a possible recession.

While it’s not possible to know what’s happening with the economy in real time, we can work around that by investing in companies that perform well during both feast and famine. If a company takes steps to prepare during an expansion, then it should be able to maintain profits in an economic downturn.

Weathering The Storm
I was recently in New York City, and as soon as it started raining, umbrella sellers appeared on street corners charging $10 for umbrellas that would have cost less than $5 an hour earlier. By carrying an umbrella before it started raining, I saved money and made it through the storm without getting soaked.

Companies face the same problem. Waiting until after the storm hits to take action is often more costly. However, companies know there will be another financial storm — every expansion is followed by a recession — so smart companies can prepare for the inevitable storm.

When evaluating investment options for my premium newsletter, Maximum Income, part of my process involves analyzing how prepared a company is to handle an economic slowdown.

One way I do this is by evaluating cash flow. This is what’s left over after reinvesting in the company and paying expenses like wages, debts and dividends. In the short term, cash flow can be more important to a company than profits.

During a recession, companies with stronger cash flows are more likely to keep operations running smoothly. Without a strong cash flow, companies may have to make drastic decisions like cutting their dividend, laying off employees or selling assets to offset falling sales.

The company I recently recommended to my Maximum Income readers is well prepared to weather the next financial storm. I can’t reveal its name to you today (out of fairness to my paid subscribers), but what I can tell you is that we don’t plan to simply buy the shares, collect our 3.3% yield and hope for the best.

Instead, we will use a unique strategy that allows us to “rent” these shares while we own them. In the process, we’ll collect a quick instant income payment of about 2.2%. Then, we can repeat this process again and again.

After we collect the 2.2% upfront, we expect to be in the trade for a little more than two months. If the stock goes nowhere or moves a little lower, that’s fine. It means we keep the income we made from renting these shares out, and we can make another similar trade. And here’s the best part: we could potentially make 11.2% a year just from renting shares, even if the stock goes nowhere.

If the stock moves above a certain price, we’ll simply sell it for a profit and keep the instant income we received. That’s as close to a win-win situation as you’ll find in the market. And you can do it with just about any stock you own.

My advice: be on the lookout for well-managed companies that are preparing for the next storm in the market. Then, you can protect yourself even further by “renting” your shares. It’s one of the easiest, most conservative ways to earn extra income in the market. If you want to learn more about this idea, then I invite you to watch this special presentation. You’ll be glad you did.