How to Hedge our bets?

[Will Pritchett]

     I have read a lot of threads about whether or not we are in a bubble that is about to burst or maybe we are due for a correction.  There are many different opinions but I would like to ask some of you for your methods for hedging your bets for a downturn that may happen in one or twenty years.  My local Real Estate market (San Antonio)  is strong but I would like to protect myself from a downturn and I worry about hedging my bets with stock market investments that would also decrease in value if there were an economy-wide slowdown or recession.  

     Lots of the people I listen to or read have great experiences in Real Estate but most have been doing it for about as long as I have (5 years or so) and haven't weathered any real storms, so to speak.  I have taken to reading books on economics etc. to get a better grasp of the economy in general and refresh college courses from years ago.  Are there any investments that you all see as moving in an inverse relationship to the rest of the economy?  Anywhere better than cash to put reserve funds?  Assuming there will one day be a downturn, I would like to have a life raft available.  

     I have embraced debt to grow, and it has worked, but now I am getting a little jittery as I have surpassed my ability to repay the debts from other income.  I know that businesses operate like this all the time but I'm betting on my own understanding of the economy and at risk is my family's future.  Any opinions?  Anyone who weathered the last downturn?  Anyone who lost it all in the last downturn?

     I am coming to this conversation from the perspective of a buy and hold guy of homes valued from about 100-180K.  I have minimum of 30 percent equity in each.  None are owned outright.  I like the perspective of @jason hartman who espouses the idea of using debt as a hedge against inflation - especially in the midst of the potentially inflationary new president (personal feelings aside).  I just feel I should have something else to protect myself in case rents drop.  My real fear is rents decreasing as I am prepared for equity to move up or down.  It is the servicing of debts that concerns me.  Some say that in a downturn, more people rent thus increasing demand for rentals but I worry about a longer lasting downturn and rents themselves decreasing eventually.  I welcome any and all comments and appreciate your time.

-Will