Tumbling stock markets show that investors are increasingly concerned about Fed rate hikes, the war, and rising energy prices.

Since 1970, each time the oil price increased by close to 100% from a year ago, the U.S. economy entered a recession. However, oil prices are now less of a burden compared to the past, as the U.S. is a net exporter of oil. Thus, rising prices do not necessarily point to a recession ahead.

Odds of a recession have certainly increased in recent weeks and any further escalation of the war between Russia and Ukraine would represent a significant drag on growth. For investors it makes sense to remain defensive. Not being fully invested in stocks, holding significant amounts of cash, keeping gold as the ultimate safe haven, and adding oil stocks as a geopolitical hedge should help to reduce portfolio volatility in uncertain times.