“Build and preserve liquidity. Cash is your lifeboat,” says Todd Barney, CFP and Partner/ President Wealth Management at Potentia Wealth.
“The number one thing I tell clients when they’re worried about a recession is to build and preserve liquidity. Cash is your lifeboat. Without it, you’re at the mercy of the storm; with it, you can ride out the waves and even chart a better course forward.
We focus on the ‘bucket strategy,’ meaning you have 3 areas for investment: 1. Cash to weather recessions or traditional market volatility. This helps to protect your lifestyle when the world seems crazy. 2. 3-5 year investing for growth; and 3. Long-term planning for retirement, or legacy planning.
So before making any dramatic moves in the portfolio, I tell clients: check your cash. Do you have six to twelve months of expenses set aside? If you do, you’ll have the flexibility to stick to your long-term plan. Liquidity may not feel exciting, but in uncertain times it’s the most powerful financial tool you can have.”
“Focus on the things that you can control,” says Martin Schamis, CFP, vice president and head of wealth planning at Janney Montgomery Scott.
“When you’re worried about a recession, it’s important to remember that whether or not it happens is outside of your control. Therefore, when you’re nervous about the market environment it’s important to focus on the things that you can control.
- Focus on your allocation. We have record markets that continue to reach new heights. When we see year-after-year of strong markets, it’s important to check your allocation compared to risk tolerance. Make sure you don’t have too much exposure to risk. Find the balance that’s right for you in terms of equity, fixed income and cash reserve.
- Another thing you can control is your spending. Review your budget – as concerns about tariff policy, trade policy and inflation persist, take a moment to review how much you’re spending and what your budget looks like, and adjust if needed.”
“Reassess your financial plan (and if you don’t have one, make one),” says Joseph A. Fernandez, CFP, president and CEO at Invenio Wealth Partners, LLC.
“The most important thing we tell clients who are worried about a possible recession is to reassess their financial plan (and if they don’t have one, make one). Folks need to think like the CFO of their own balance sheet. Shore up cash reserves as much as possible — perhaps extending their emergency fund to nine to twelve months, deferring major discretionary expenditures and assess spending on things that are not necessarily a priority (separate the ‘needs’ from the ‘wants’). While we do not control the timing or depth of recessions, we can put ourselves in control of our finances, which will help to reduce the anxiety these periods can cause.”
“Explore their job security,” says Julian B. Morris, CFP, chartered financial consultant, behavioral financial advisor and accredited investment fiduciary at Concierge Wealth Management.
“If clients are worried about a recession, one of the key items we do is explore their job security. If it is likely they will keep their job, we will worry less, but keep extra cash on hand just in case. If they think they’re a likely candidate to lose their job, we build up an excess cash reserve to weather an economic downturn. If their job is related to economic cycles, such as a sales executive or other commission based roles, we again make sure they have ample cash available to weather any financial storms so they don’t have to go into their portfolios to live in the event they are severely under their quota.”
“Moving some percentage of stock holdings to fixed income investments or cash,” says Daniel Forbes, CFP and owner of Forbes Financial Planning.
“For clients worried about a recession, our number one priority is to review investment allocations to see if adjustments need to be made. The market’s ‘tariff tantrum’ earlier this year was a good example of a time we reached out with this in mind. It’s important to have flexibility in the portfolio to make adjustments, even small ones, if the goal is to take some risk off the table. Those expecting a near term recession could attempt to reduce risk by moving some percentage of stock holdings to fixed income investments or cash.”
“Focus on buying appreciating assets,” says Kevin Pira, CFP and owner at Pira Wealth Management.
“The No. 1 thing I tell clients is ‘when in doubt, zoom out.’ Recessions are a normal part of the business cycle. Although it’s easy to get panicked and fall into the trap of making poor financial decisions because of a recession (or the thought of one coming), we want to zoom out and look at how markets trend upwards over time. Look at any chart of the major U.S. indices, and recessions are simply a small blip in time. You want to focus on the bigger picture and possibly utilize cash on the sidelines to purchase undervalued assets.
If consumers are concerned that a recession could happen soon, then bolstering cash reserves is a must. Ample emergency funds may be extended beyond the recommended 3-6 months to 6-12 months to weather the storm. That doesn’t mean panic-selling your stocks for cash. You really want to avoid selling in a recession and focus on buying appreciating assets.”
“Creating a disciplined monthly budget,” says Jason Fannon, CFP and senior partner at Cornerstone Financial Services.
“For clients who are worried about a recession, I often like to shift the focus to what I and they can control. These items would include creating a financial plan to ensure clients have the following:
- Adequate emergency funds should they lose their job or income (in a recession).
- A well-balanced portfolio which can withstand the possible negative market forces of a recession.
- Debt strategies, including paying down high-cost debt and/or eliminating debt.
- Creating a disciplined monthly budget which allows for lifestyle expenses and incorporates savings.
While we can’t predict the exact timing of recessions, I, along with the client, can ensure that they are properly prepared to weather an economic downturn.”
“Do a full review of your current portfolio and understand how it is invested,” says Wheeler Pulliam, CFP and financial consultant at Xponify Financial.
“The number one thing I tell my clients to do if they are worried about a pending recession is to do a full review of their current portfolio and understand how it is invested. Many times, fear is caused by the unknown. Not knowing makes us nervous and scared. If you don’t know how your portfolio will perform when the market drops by 30 to 40%, then you become anxious and scared. People tend to make poor decisions when they are scared. But if you know what your investments are, and how they behave when times are good and bad, then you will not be so scared about the future and less prone to make a rash decision.”
“Don’t panic!” says Eric Mangold, FA, certified wealth strategist and founder of Argosy Wealth Management.
“The No. 1 thing I say to my clients if they are fearing a recession is don’t panic! Understand that while they aren’t the most comfortable economic cycle, recessions do happen. We then review a client’s portfolio, risk tolerance and their overall financial strategy. Will a recession completely derail their strategy, aka meeting their financial goals or will it simply be a bump in the road? Do we need to make any moves or adjustments? And so on.”
“Do nothing, other than what you are doing now,” says Harold Schwartz, CEO and chief investment officer at DMK Advisor Group, Inc.
“My answer may surprise you and I’m sure it’s a contrarian point of view. Do nothing, other than what you are doing now… Let me take the harshness out of that statement. Doing as little as is necessary is probably the better explanation. If you have a strategy that has been working, either through your advisor or on your own, review it! Don’t undo everything you have done to make money. We have continually advised clients to do nothing until such time it is no longer predicted but actually here.
My last ‘go to’ strategy for both my clients and myself is cash! Take the profit of the last few years off the table, bank it, only your advisor will object. As things change, start redeploying your cash back into the market. Catch the rebound because it will always rebound. As someone famous had to have said ‘you cannot lose cash.’”
“Monitor debt ratios to ensure liabilities remain manageable,” says Pamela Ladd, senior manager of Personal Financial Planning for the American Institute of CPAs, CPA and personal financial specialist.
“As economic uncertainty grows, financial planners help clients navigate recession fears with clarity and confidence by emphasizing that each client’s financial plan is designed to provide long-term guidance — built to weather market and economic fluctuations. Clients can take proactive steps to strengthen their financial resilience:
- Confirm that emergency funds are adequately stocked to cover essential expenses.
- Monitor debt ratios to ensure liabilities remain manageable.
- Focus on controllable factors such as spending habits and tax efficiency.
- Avoid emotional decisions that could derail long-term goals.
- Use planning tools and educational resources to visualize financial outcomes for those concerned clients.”
“Have 6-12 months of essential expenses in cash,” says Cary Sinnet, CFP, senior manager of Personal Financial Planning for the American Institute of CPAs.
“The No. 1 thing to help clients worried about a recession is making sure they have 6–12 months of essential expenses in cash. That cushion provides flexibility and peace of mind. Beyond that, it’s about avoiding emotional market moves and checking in with a CPA financial planner to stress test your financial plan. You can’t predict recessions with precision, but you can prepare for them.”
Looking for an adviser? You can use this free tool that can match you to a fiduciary adviser, from our partner SmartAsset, as well as resources like NAPFA and the CFP Board.
“Recessions can actually create opportunities if you’re prepared,” says Randy Carver, certified financial advisor and founder of Carver Financial Services.
“The biggest piece of advice I can give if you’re worried about a recession is this: don’t panic. Recessions are a normal part of the economic cycle. In fact, the real danger isn’t the recession itself, it’s making rash, fear-based decisions that can hurt you long after the economy recovers.
Here’s the silver lining: recessions can actually create opportunities if you’re prepared. Prices often come down, whether it’s in the stock market, real estate, or even day-to-day expenses. For disciplined investors, it can be like shopping during a big sale. If you’ve set aside cash and kept your plan in place, a recession can actually help you build wealth for the future.”
“Stay disciplined and proactive, rather than trying to predict the exact timing of a recession,” says Robert Cannon, certified financial fiduciary at Experity Wealth.
“The main thing I’m advising my clients to do if they’re concerned about a potential recession is to focus on strengthening their financial foundation rather than making reactive moves. I encourage clients to focus on what they can control:
- Risk management: Ensuring their portfolio matches their risk tolerance and time horizon, using strategies like bucket planning to protect near-term retirement income needs.
- Debt management: Paying down high-interest debt to reduce financial stress if the economy slows.
Ultimately, my advice to clients is to stay disciplined and proactive, rather than trying to predict the exact timing of a recession. A well-prepared plan can help them weather downturns and even take advantage of opportunities when markets recover.”
“Harvest tax losses where appropriate,” says Omar Qureshi, certified private wealth advisor, certified investment management analyst and managing partner at Hightower Wealth Advisors St. Louis.
“As an advisor, my No. 1 rule in recession scares is simple: don’t predict — prepare. Match money to the time frame needed. For example, park 0-2 years of planned spending in cash/T-bills so you’re never forced to sell risk assets at bad prices. Keep 2-5 years in high-quality bonds, and leave 5+ years in diversified equities. Add automatic rebalancing so discipline beats emotion.
If you’re worried right now: top up an emergency fund (6-12 months if income is variable), pay down high-rate/variable debt, rebalance investments back to target (trimming from stocks to lower risk assets), harvest tax losses where appropriate, and tilt toward quality balance sheets in the stocks you own. Retirees should hold 12-24 months of withdrawals in short-term Treasuries or a ladder. Accumulators should keep contributions on — downturns are when future returns go on sale.”
