It's foolish for investors to try to time the next recession - here's a surefire 3-part strategy UBS says can thrive in any environment

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• 2018 is shaping up to be one of the roughest years in recent memory for investors, and 2019 could be similarly unpredictable, says UBS.
• Michael Crook, the head of Americas investment strategy at UBS, outlines a three-part strategy built to thrive in any market environment, recession or not.

When investors look back on 2018, they'll likely think of it as the year where there was nowhere to hide.

US equities are headed for their worst year in a decade, while international stocks and bonds are also on pace to finish negative for 2018. That widespread weakness has, in turn, dragged down the performance of balanced portfolios whose diversification is supposed to insulate them from difficult markets.

And unfortunately for investors seeking returns anywhere they can find them, it's anyone's guess how 2019 will unfold.

Michael Crook, the head of Americas investment strategy at UBS, could see stock performance going either way. On one hand, he notes that the combination of recent selling and strong expected earnings growth makes equity valuations attractive. But on the other, he recognizes that a bear market could strike "some time in the near future."

What Crook does know for sure is that it's a fool's errand to try and perfectly time an economic recession and whatever market pullback accompanies it. And, by that same logic, he says it's inadvisable to ignore mounting external pressure in favor of seemingly strong fundamentals.

So what's the solution? Crook says investors should consider UBS's so-called 3L strategy.

"Doing so ensures you have the right amount of investment risk - not too much and not too little - for your current situation," he wrote.

Here's a full breakdown of Crook's 3 Ls:

Liquidity

Crook says this is L is designed to make sure an investor has adequate cash flow over a 2- to 5-year period.

"A liquidity strategy helps separate spending needs from portfolio volatility, and provides ballast to make it through bear markets," he said.

Longevity

This L is intended to make sure an investor has enough assets and resources to use for the rest of his/her life. Crook described this as "a well-diversified portfolio but with an eye to inflation while managing downside risk."

He continued: "Over time, these assets can be transitioned to replenish the Liquidity strategy."

Legacy

This strategy is designed to include assets that exceed what you need for your own lifetime.

"It clarifies how much a family can do to improve the lives of others - either now or in the future," Crook said.