As the economy continues to limp along, experts have started to concede Australia may indeed be slipping into recession.
Prime Minister Kevin Rudd has all but admitted Australia could be in recession by the end of the year.
While he did not mention the word recession, he said it would be "virtually impossible" for Australia to sustain economic growth.
As Australia moves closer to a confirmation of a recession, a new menace has emerged: the D word - depression.
This week's Conference of Major Superannuation Funds on the Gold Coast was packed with grim forecasts about the Australian economy and investment climate.
Bridgewater Associates portfolio strategist Rob Zink went so far as to say the financial indicators were pointing to a depression.
Zink compared what Australia was experiencing now with the Great Depression in the 1930s and Japan in the 1990s and found similarities.
"The objective right now shouldn't be trying to make money, but to preserve capital," he said.
Despite this strong opinion, not all pundits were bracing themselves for a depression.
AMP Capital Investors head of investment strategy Shane Oliver countered Zink's argument in a later plenary session.
Oliver said the amount of government intervention, that is, the lowering of official interest rates and the stimulus packages, would be enough to stave off further downward spirals.
Queensland Investment Corporation chief executive Doug McTaggart said rather than Australia heading towards a depression, the financial services industry would halve.
"It is not a household debt story," McTaggart said.
For institutional investors then, perhaps the best thing to do in such a time of uncertainty is to take a closer look at their investment strategies.
"We've learnt through this downturn that diversification works great until you really need it," McTaggart said.
