You've probably seen the headlines: "Market Crash Coming," "Recession Around the Corner," or "Time to Sell Everything." These fear-inducing messages are everywhere, especially on YouTube, social media, and financial news outlets. Whether it's concerns about markets being at all-time highs, geopolitical tensions, trade wars, or the latest AI bubble speculation, there's always something new to worry about.
But here's the thing: crashes are normal. And more importantly, the question isn't when the next crash will come—it's whether you're positioned to weather it when it inevitably arrives.
Let's start with some definitions. A correction is when markets decline by 10% or more. This typically happens at least once a year on average, though it doesn't mean the entire year ends in negative territory—just that at some point during that 12-month period, there was a 10% pullback.
A bear market occurs when markets drop 20% or more. Since 1928, the S&P 500 has experienced 26 bear markets over roughly 100 years. That works out to a bear market every three to four years on average.
Here's what's fascinating: every time a bear market happens, it feels unprecedented. It feels different. It feels like the world is ending. But the data tells a different story. Over that same 100-year period, the S&P 500 has delivered approximately 9% average annual returns and has never had a negative 20-year rolling period.
Instead of trying to predict when the next crash will happen (spoiler: no one can), focus on whether your portfolio and mindset are prepared for inevitable market downturns. Here are five fundamental pillars to help you crash-proof your investments:
As a chiropractor and business owner, you're already taking on concentrated risk with your practice. You might also have significant assets tied up in your principal residence or rental properties. When it comes to growing wealth beyond your business and real estate, diversification is essential.
A globally diversified portfolio that owns 15,000-16,000 companies across different sectors and geographies significantly reduces your risk compared to owning one business in one location in one industry. This diversification naturally lowers volatility—while individual stocks like Tesla might experience wild price swings, a portfolio of thousands of companies smooths out those ups and downs.
Here's an important stat: over the last 100 years, the S&P 500 has had positive years 75% of the time. And there's never been a 20-year period where investors lost money. This means holding cash over the long term is actually riskier than investing in a globally diversified portfolio, as inflation steadily erodes your purchasing power.
Markets always recover given enough time—that's what history consistently shows us. The key to weathering crashes isn't trying to time your exit and re-entry; it's staying invested through the volatility.
Missing just a few of the best days in the market can dramatically impact your long-term returns. If you're in your 30s, 40s, or even 50s with decades ahead of you, getting invested and staying invested is more important than waiting for the "perfect" moment.
The takeaway? Don't obsess over what the market returned in 2025 or what it might return in 2026. Don't get too excited about the ups, and don't panic about the downs. Maintain your investment discipline year after year.
Here's a simple analogy: Apple products never go on sale. But Apple stock does. If a MacBook Pro that normally costs $2,500 was suddenly 30% off, you'd jump at the opportunity. Yet when Apple stock (or the broader market) drops 30%, many investors panic and sell instead of buying more.
By automating monthly investments regardless of market conditions, you naturally buy more shares when prices are low and fewer shares when prices are high. This dollar-cost averaging takes emotion out of the equation.
When markets correct and go down, it's not something to fear—it's an opportunity to continue investing the way you always have and stick to your strategy.
Rebalancing means maintaining your target asset allocation by periodically selling assets that have outperformed and buying those that have underperformed. For example, if you have a portfolio of 30% Canada, 30% US, 20% international equities, and 20% bonds, and Canadian assets grow to 33% of your portfolio, you'd sell some Canadian holdings to restore the original 30% allocation.
This is psychologically difficult because it requires selling investments that have done well and buying those that haven't performed as strongly. But rebalancing is crucial for managing risk and capturing long-term returns. Many investors use systematic rebalancing mechanisms to remove the emotional burden from this process.
It's 100% better to be in a less risky portfolio (like 60% equities, 40% bonds) that you can stick with during market downturns than a higher-risk portfolio (80% equities or 100% equities) that causes you to panic and sell at the worst time.
If you've never experienced a market correction, consider starting with a more conservative allocation and gradually increasing risk as you gain experience riding through inevitable market volatility. If you go through a major crash and find yourself losing sleep or feeling compelled to sell, that's a sign you're taking too much risk for your comfort level.
Warren Buffett famously said, "The stock market is a device for transferring wealth from the impatient to the patient." Patience truly is an investor's best friend. A globally diversified portfolio isn't going to be exciting or provide entertainment—and that's exactly the point.
Morgan Housel offers another powerful perspective: "Market returns aren't free. Volatility is the fee you pay for long-term returns, not a fine you pay for doing something wrong."
Think about the difference between a fee and a fine. A fee is something you willingly pay for a service you value. A fine is punishment for doing something wrong. When your portfolio experiences negative volatility, it's not because you made a mistake—it's simply the admission price for long-term returns.
Whether you're a seasoned investor or just getting started, here are concrete steps you can take:
Review your asset allocation. Does it still match your timeline, risk tolerance, and capacity for risk? Are you comfortable with your current level of risk exposure?
Create an investment policy statement. Write down your investment mandate—not just something you keep in your head, but a documented plan you can review when markets get scary to remind yourself of what you're trying to accomplish.
Consider working with a financial advisor. Having someone on your team who knows your financial life and can provide behavioral coaching during volatile periods is invaluable. Even experienced investors benefit from an objective perspective during scary market moments. Your advisor acts as a pillar between you and potentially catastrophic emotional decisions.
The best crash-proof strategy isn't avoiding crashes—it's building a portfolio and mindset that can withstand the crashes that are inevitably coming. We don't know when the next market downturn will happen. It could be tomorrow, or we could see another strong year ahead.
But here's what we do know: time in the market is far more important than timing the market. If you're a long-term investor with a globally diversified portfolio, the most powerful thing you can do is stay the course.
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