What you want to achieve
How to protect your portfolio in a market crash
Every investor will live through several large market falls. The damage they do depends less on the fall itself than on what you do during it.
The challenges
- Panic selling after large falls, then missing the recovery.
- Portfolios more concentrated than people realise.
- Not understanding how long recoveries can take.
- Headlines that make every fall feel like the start of a collapse.
How a disciplined process helps
Understand the maths of losses
A 50% fall needs a 100% gain to get back to where you started. That is why limiting large drawdowns matters as much as chasing returns.
Our article on what volatility really means puts falls in context.
Build protection in advance
Diversify across sectors, countries and asset types that behave differently, cap the size of each position, and keep a cash buffer for near-term needs.
Protection put in place after a fall usually comes too late.
Write your crash plan now
Decide what you will do if the market falls 10%, 20% or 30%: rebalance, buy more, reduce risk or do nothing. Writing it down when calm makes it far easier to follow when frightened.
The weekly Market Regime helps you judge conditions without reacting to every headline.
Where to start
- What 20% volatility really meansAnd why so many people panic.
- Market falls: what history showsSeasonality, drawdowns and how to respond.
- Weekly Market RegimeA simple weekly read on whether conditions favour risk-taking or caution.
- Why the most fearful investors aren’t moving marketsFear, positioning and what to do.
Questions people ask
Should I sell before a crash?
Nobody can reliably predict crashes. A plan that limits damage works better than trying to time the market.
How long do markets take to recover?
Recovery times have varied from months to many years, which is why diversification and position limits matter.
Is cash a good hedge?
Cash protects against falls but loses value to inflation. A buffer for near-term spending is sensible for many people.
Important: this page is education and information only. It is not financial advice or a personal recommendation, and it does not take your circumstances into account. The value of investments and pensions can fall as well as rise, and you may get back less than you put in. Past performance is not a reliable indicator of future results. If you are unsure what is right for you, speak to a regulated financial adviser.