It’s been a nerve-wracking year for investors.

With ongoing stock market volatility, high inflation and interest rate hikes, many wonder if we’re heading for a prolonged economic downturn.  

“I think we have to be defensive,” said certified financial planner Ivory Johnson, founder of Delancey Wealth Management in Washington, D.C.

While it’s impossible to predict exactly what will happen, financial advisors are preparing clients for whatever may be on the horizon. 

We spoke with experts from CNBC’s Financial Advisor Council to see what they’re predicting for the fourth quarter of 2022. Here’s what they are telling clients.

Delivering his annual policy speech in Jackson Hole, Wyoming, Federal Reserve Chairman Jerome Powell in August warned the central bank’s plans to continue raising interest rates to fight soaring prices may cause “some pain” to the U.S. economy. 

And on Sept. 21, Powell said his “main message hasn’t changed” since the August symposium, vowing to bring inflation down to 2%.

However, the Fed’s goal may be difficult to achieve, especially in the near term, according to Lee Baker, a CFP and owner of Apex Financial Services in Atlanta.

“The question for the markets becomes how much progress towards the 2% goal needs to be made before they take their foot off the rate increase pedal?” Baker asked. “Secondarily, just how much pain will there be on the way?”

Despite falling gas prices, inflation was higher than expected in August, and rising costs remain an issue for investors, even higher earners. 

Indeed, nearly two-thirds of Americans making $100,000 or more are “very concerned” about inflation, according to a recent CNBC poll.

It’s a top concern “cutting across all age groups,” said Marguerita Cheng, a CFP and CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland.

While retired clients worry about rising health-care and long-term care costs, clients with children may stress about paying for college, she said.  

With two negative quarters of economic growth, there’s an ongoing debate about whether the U.S. has dipped into a recession.   

But Johnson has already warned clients about the possibility of more volatility, pointing to the Fed’s rate hikes.

He has purchased gold, utilities and consumer staples while increasing cash and reducing technology positions.  

“This isn’t the year to try and kill it,” Johnson added. “You just want to limit the damage right now.”

While Baker doesn’t suggest major changes, there may be “good opportunities” — such as real estate — amid relatively high inflation due to yield and appreciation, he said.

And Cheng has been eyeing stocks paying dividends, which are part of company profits sent back to investors.

“We’re not looking for high flyers,” she said, opting for companies with strong financials with a history of increasing dividends.

Meanwhile, some clients are eager to find stable places to park cash while preserving their purchasing power.

For safety, Cheng suggests online high-yield savings accounts, especially with the Fed’s latest rate hike.

She also recommends Series I bonds, an inflation-protected and nearly risk-free asset, paying a 9.62% annual rate through October.  

“That’s still a tremendous opportunity for people that haven’t taken advantage of it yet,” Baker said.

Of course, there are two downsides: You can’t touch the money for at least one year, and you’ll give up three months of interest by redeeming within five years.