1 Move to Avoid at All Costs if the Stock Market Crashes in 2026
This has been an unusual year for the stock market in many ways. After entering correction territory earlier this year, S&P 500(SNPINDEX: ^GSPC) it is now approaching its all-time high.
However, many investors are worried that this rise in the stock market will not last long. An overwhelming majority of Americans are at least somewhat concerned about the coming recession, according to a December 2025 survey by financial institution MDRT.
To be clear, no one knows when or if a recession will occur. bear market is coming. However, it would be wise to prepare your investments just in case. If a major downturn is coming, this is the biggest investment mistake you can make.
Image source: Getty Images.
If the market takes a turn for the worse in 2026, it may be tempting to sell your investments at the first sign of trouble. After all, if you can get out of the market before prices drop even further, it could theoretically make you a lot of money.
But the market is not that predictable and selling your shares can be incredibly costly. There is always a chance that prices will recover quickly. sell your investments You can miss these gains instantly. But at the same time, if you wait to sell until prices have fallen significantly and it is clear that we are headed for a bear market, you run the risk of facing huge losses.
For example, let’s say you sold your investments in early April of this year. The S&P 500 fell close to 19% between February and April, and it may be tempting to exit the market immediately if you’re worried stocks will fall further.
But within a few weeks, the S&P 500 was on the rise again. In this case, selling in April would be the worst-case scenario. Not only will you risk selling your shares for less than you paid for them, but you will also miss out on a profitable recovery period.
While it may be easier said than done, one of the best investment moves you can make during a market downturn is to simply wait it out. It’s natural to want to take action to protect your portfolio, and watching your account balance dwindle during a bear market can be alarming even for experienced investors.
But don’t forget to lose value It’s not the same as losing money. If stock prices fall, your portfolio may lose value in the short term. However, when the market eventually recovers, your portfolio will likely rebound and regain lost value. As long as you invest and avoid selling, you won’t lose money.
But the important thing is to make sure you invest in quality stocks that can withstand a bear market or recession. The best stocks are those with strong business fundamentals. If a company is on a healthy foundation, it is much more likely to survive even severe economic turmoil.
The right investment for you will depend on your risk tolerance, goals, and investment preferences. Some investors enjoy building a highly personalized portfolio full of individual stocks, while others prefer to stick to low-cost index funds or ETFs.
If you’re looking for a sure-fire investment that’s guaranteed to survive a market downturn, consider an S&P 500 ETF or similar broad-market fund — such as Vanguard S&P 500 ETF(NYSEMKT:VOO) or Vanguard Total Stock Market ETF(NYSEMKT:VTI) It could be a great option.
The market has a proven track record of rebounding after periods of volatility. In fact, Crestmont Research’s analysis found that the S&P 500 has ended every 20-year period with positive total returns throughout its history. Because broad market ETFs track the performance of the market, these investments are incredibly likely to generate positive returns over time.
No one knows where the market will be in six months or a year, but that doesn’t mean you can’t take the necessary steps to prepare. By investing in quality stocks or funds and holding them for as long as possible, your portfolio is much more likely to survive whatever the market faces.
Before buying shares in the Vanguard Total Stock Market ETF, consider:
Motley Fool Stock Advisor The analyst team just determined what they believe to be Top 10 stocks for investors to buy now… and Vanguard Total Stock Market ETF wasn’t one of them. The 10 stocks that made the cut could deliver monster returns in the coming years.
Think about when netflix You made this list on December 17, 2004… if you invested $1,000 on the date we recommended, You would have $540,587!* Or when Nvidia You made this list on April 15, 2005… if you invested $1,000 on the date we recommended, You would have $1,118,210!*
Now it is worth noting that Stock Advisor total average return 991% — a market-beating performance compared to the S&P 500’s 195%. Don’t miss the latest top 10 list available Stock Advisorand join an investment community created by individual investors, for individual investors.
Katie Brockman It has positions in the Vanguard S&P 500 ETF and Vanguard Total Stock Market ETF. The Motley Fool holds positions in and recommends the Vanguard S&P 500 ETF and the Vanguard Total Stock Market ETF. The Motley Fool has a feature disclosure policy.
