Australian share markets have been volatile throughout the first half of 2026, with ASX stocks fluctuating wildly in value.
Ongoing geopolitical tensions, concerns about further interest rate hikes, stubbornly high inflation, and a tech-sector-wide sell-off have all weighed heavily on investor sentiment and raised anxiety about a potential sharemarket crash.
But as the Oracle of Omaha, Warren Buffett, once said, "Be fearful when others are greedy and greedy when others are fearful". In other words, a sharemarket crash might be the best time to buy ASX stocks.
Here are three ASX stocks I'd add to my portfolio in a sharemarket crash.
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Xero Ltd (ASX: XRO)
Xero has reliable, sticky subscription revenue. The nature of its business means its customers are likely to keep paying for its services and products over a long time.
At the same time, the ASX tech stock still has a relatively small market position, suggesting there is potential to unlock significant growth. The company is actively expanding its product suites, such as payroll and workflow automation, and also its global presence in the UK and the US.
The company's latest FY26 result was impressive too. In mid-May, Xero reported a 31% increase in operating revenue, and its adjusted EBITDA is up 18%.
I see most technology shares as undervalued right now after the latest panic that AI could disrupt traditional software models. A further sharemarket crash could create an even greater opportunity for long-term investors to buy a high-quality stock primed for strong growth.
Wesfarmers Ltd (ASX: WES)
Wesfarmers is a different category than Xero. Rather than a high-growth ASX tech stock, Wesfarmers is a leading Australian blue-chip company.
It's this stability and consistent long-term net profit growth that make the company a classic defensive stock. The retail conglomerate is able to provide investors with stability during an ASX sharemarket crash.
Its stability also means it can pay shareholders a consistent passive income. For FY26, the ASX defensive stock is expected to pay a total dividend of $2.13 per unit, translating to a forward dividend yield of around 2.7% at the time of writing.
iShares S&P 500 ETF (ASX: IVV)
IVV is another excellent investment for long-term investors to make during a sharemarket crash.
Rather than investing in just one ASX stock, IVV gives its shareholders exposure to around 500 of the largest companies listed in the US, including global brands, businesses with large customer bases, and those with strong balance sheets. For example, the ETF holds major names such as Nvidia, Apple, and Amazon.
The benefit of investing in an ETF rather than a single stock is that if one company suffers a share price decline, it would have a limited impact on the ETF as a whole.
Buying IVV during a sharemarket crash is generally a lower-risk investment than trying to pick individual winners. Instead of betting on a single company, investors are effectively buying a slice of the largest US businesses at once.
