This has been an unusual year for the stock market in many ways. After falling into correction territory earlier this year, S&P 500 Index(SNPINDEX:^GSPC) Now approaching new all-time highs.
Still, many investors worry that the stock market’s rally won’t last long. According to a December 2025 survey by the financial association MDRT, a whopping 80% of Americans are at least slightly concerned about the coming recession.
To be clear, no one knows when or if a recession or bear market will come. But it’s wise to be prepared to invest just in case. If a severe recession is coming, this may be the biggest investing mistake you can make.
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If the market takes a turn for the worse in 2026, you may be tempted to sell your investments at the first sign of trouble. After all, if you can exit the market before prices drop further, it could theoretically save you a lot of money.
However, the market is not that predictable and the cost of selling shares can be very high. There’s always the chance that prices can rebound quickly, so if you sell your investment right away, you could miss out on those gains. But at the same time, if you wait until prices drop significantly and it’s clear we’re headed for a bear market to sell, you run the risk of taking a huge loss.
For example, let’s say you sold your investments in early April of this year. The S&P 500 plunged nearly 19% between February and April, and if you’re worried about further losses, you might want to get out of the market now.
Within weeks, however, the S&P 500 began to recover. In this case, selling in April would be the worst-case scenario. Not only do you risk selling the stock for less than you paid for it, but you also miss out on a lucrative recovery period.
While it’s easier said than done, one of the best investing moves you can make during a market downturn is to 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 unsettling for even seasoned investors.
But remember, losing value does not mean losing money. If stock prices fall, your portfolio may lose value in the short term. But once the market eventually recovers, your portfolio may rebound and regain its lost value. As long as you stay invested and avoid selling, you shouldn’t lose any money.
The key, however, is to make sure you’re investing in quality stocks that can withstand a bear market or recession. The best stocks are those with strong business fundamentals. If a company has healthy fundamentals, it is more likely to survive even during severe economic disruptions.
The investment that’s right for you depends on your risk tolerance, goals and investment preferences. Some investors like to build a highly personalized portfolio full of individual stocks, while others would rather stick to low-cost index funds or ETFs.
If you’re looking for a foolproof investment that’s almost guaranteed to survive a market downturn, look no further than an S&P 500 ETF or a similar broad market fund – e.g. Vanguard S&P 500 ETF(NYSE: VOO) or Vanguard Total Stock Market ETF(NYSE:VTI) Might be a good choice.
Markets have a good track record of recovering from periods of volatility. In fact, analysis by Crestmont Research found that throughout the history of the S&P 500, every 20-year period has ended with a positive total return. Because broad market ETFs follow the performance of the market, these investments have a high chance of generating positive returns over time.
No one knows what the market will be like in six months or a year, but that doesn’t mean you can’t take steps to prepare. By investing in quality stocks or funds and holding them for as long as possible, your portfolio is more likely to survive no matter what the market does.
Before buying shares of Vanguard Total Stock Market ETF, consider the following factors:
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Katie Brockman holds positions in the Vanguard S&P 500 ETF and the Vanguard Total Stock Market ETF. The Motley Fool owns and recommends the Vanguard S&P 500 ETF and the Vanguard Total Stock Market ETF. The Motley Fool has a disclosure policy.
1 Avoid a 2026 Stock Market Crash at All Costs Originally published by The Motley Fool
