Surviving the next market crash

The S&P/ASX 300 had a good July, but the road ahead could be bumpier. Prepare yourself now to survive the next market crash.

The S&P/ASX 300 had a good July, but the road ahead could be bumpier. Prepare yourself now to survive the next market crash.

In their monthly investment survey, Mercer’s David Stuart says macro-economic developments have created “an extremely unpredictable short-term environment with potentially significant downside risk.”

Is he predicting the next market crash?

Not exactly, but he does expect some near-term fireworks. Sensibly however, Mercer are advising their clients to balance the short-term risk with a longer-term “positive equity valuation story.”

The prospect of a market crash scares investors. Who can blame them? It’s not pleasant to see your portfolio cut by 20% in a short space of time. people.

Stock market corrections are part and parcel of investing. We’ve already had one this year, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) plunging 10% from its May peak to its June trough.

At the time, it felt like the investing world was about to end. We received emails going along the lines of…

“With everything going on in the economy now, is it worth pulling money out of the share market in order to buy back in a few weeks when prices are even lower?”

We suggested such a plan would end badly, and to date we’ve been proven correct.

The market has risen more than 7% in that time, with popular holdings such as Commonwealth Bank (ASX: CBA), ANZ (ASX: ANZ), Insurance Australia Group (ASX: IAG) and AMP (ASX: AMP) faring even better. Selling in a fit of panic is never a good investing strategy.

Mercer are effectively saying that when viewed from a long-term perspective, stock valuations are attractive. There may be some short-term volatility, but if you can see through the falling share prices and keep focused on the long-term, through the beauty of compounding returns, you still should be able to generate significant wealth from investing in the share market.

Even after reading this, if you are worried about a market crash, you might want to first check out our new free report, Read This Before The Market Crashes. It could save you hours of heartache, and thousands of dollars. Click here to request your report now, whilst it’s still free and available.

Bruce Jackson is the Motley Fool’s General Manager. The Motley Fools purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691)

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »