From CNBC: 2025-03-24 15:22:00

The likelihood of a U.S. recession has increased due to an escalating trade war, with probabilities rising to 36% in March and almost 50-50 according to recent surveys. President Trump has not ruled out the possibility, but economists believe the chances are relatively low.

Financial experts advise against market timing and emphasize the importance of maintaining a diversified portfolio rather than trying to predict market movements. Emotional responses during market downturns often lead to underperformance compared to the broader market.

Investors who worry about falling stock prices during a recession should resist making hasty decisions. Missing rebounds can be costly, as stocks historically recover after hitting bottom. It’s crucial to avoid withdrawing from stocks during market declines, especially for retirees relying on investments for income.

During a potential recession, investors should review their asset allocation and make necessary adjustments. Maintaining a diversified portfolio is key, with options like target-date or balanced funds for those seeking professional management. Young investors may consider a higher stock allocation, while retirees should have a less risky portfolio to withstand market fluctuations.

Read more: How investors can ready their portfolios for a recession