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Nervous About the Stock Market? Here are 10 Investment Strategies to Survive A Market Downturn

It’s the nature of the beast that, when investing, the markets will eventually take a slide. Any equities portfolio can take a dramatic dip, sometimes for no reason at all. And when that happens, it can be easy to panic.

Join us, today, for our list of the ten best ways to survive a market downturn, and find out how to make hay even when the sun stops shining.

Manage Your Fears

Fear and insecurity play an important role in a global market crash. There have been more near-catastrophic dips in the market over the years that have righted themselves overnight. A lot of this activity comes down to the perceived value of any given market.

This is why it’s important to keep a level head during investment slumps. The Dow is resilient, and it’s been able to maintain its viability over the years in spite of dozens of economic black spots. Terrorism, scandals and other calamities come along, but many of them are forgotten about as fast as they arise.

Separate your emotions from your decision-making. Investing is a long-term game, and you’re likely to go through more than just this one slump in the years to come.

Invest Wisely

Before we start this point, yes, investing wisely is easier said than done. But we’re not talking about being able to see into the future or game the system. What we mean, in this case, is continuing to make investments with money you can afford to lose.

Short-term funds are still central to maintaining your standard of living. In no way should you be investing them in stocks right now, no matter how scared you may be.

Equity investment is only ever a good idea if you have an investment horizon of five years, minimum. Don’t invest money that will hurt you if you lose it. Market issues can and do wreak havoc with the lives of people who don’t know how to invest wisely – don’t become a statistic.

Play Possum

An underrated strategy in a bear market is actually to take some time off and play dead, so to speak. Fighting the tide in a toxic environment like this can be dangerous, so your best bet is usually to stay calm.

Don’t make any sudden or unpredictable moves. The market is filled with people watching for potential weaknesses in your strategy, so save yourself the energy and go dark a little while. What this means, financially, is moving more of your portfolio over to money market securities.

Look for certificates of deposit and U.S. Treasury bills. High liquidity assets that feature short maturities are your safest bet while you weather this storm. Keep your head low and be smart with your portfolio.


Sometimes, the best investments during stock market crash situations are the oldest. It’s a tried and true fact of the market: gold is a brilliant asset for protecting your money. It’s a physical asset, and buyers have opportunities to trade in it wherever they are in the world.

The inherent value of this commodity is that people appreciate something they can hold. That security is especially valuable in dark times when equities are on the decline. 

Beware, though, because gold can be fickle because of this sentiment as well. It’s harder to predict based on market activity and, once things stabilize, you might not have a good bead on how well it’s likely to perform. 


Money is one of the basic pillars of our society, and physical cash is one investment that is likely to weather a crisis just fine. Dollars consistently outperform standard stocks, even with the stock market declining.

If the market’s got you feeling insecure, hold onto a little more of your money in cash, just for safe keeping. Your portfolio is more likely to stay healthy if you don’t have it all in equities, and you can always reinvest that cash once things even out.

Defensive Industries

Healthy securities that perform normally during down periods are known as non-cyclical or defensive and can be a pillar for you. With stable dividends and better returns, these industries stay consistent in an unstable market.

Look for toothpaste, shampoo, and other non-durable producers. These industries are always going to be in use, even in times of hardship.

DCA: Average Your Down Costs 

There’s an uncomfortable fact you’ll need to get used to during an economic downturn: most stock markets go through negative years. The business cycle isn’t yours to control, and this is bound to come up.

Long-term investors operate on an average timeline of 10+ years. If this is the case for you, you might want to consider dollar-cost averaging or DCA. Purchase shares regardless of their price when the market is down, and you’ll end up with a series of low-price assets. These will help you average down over time, creating a better entry price environment for the shares you do own.

Diversify Your Portfolio

Diversifying your assets is a classic strategy when it comes to safe investing, and can be a lifesaver during a market slump. With a percentage of your portfolio invested in stocks, bonds, and cash, you’re taking your eggs out of the one basket and spreading them out.

Alternative assets are great in terms of diversification, as well, but really it’s up to you how you divide your portfolio. Take your risk tolerance into account, and plan your deadlines and goals carefully. 

Your situation is unique. Allocating your assets according to a strategy may help you avoid further potential pitfalls.

Research Viable Value Stocks

The market turning bear doesn’t necessarily mean it’s a bad time for investors. You just need to know which equities to look out for.

Value investors may find various robust opportunities during a slump. Buying opportunities with good companies come up during this time, as the market tends to push everybody down. You’ll find some attractive valuations during these periods and if you can make a smart investment, you can buffer your position.

Read about managing your futures with expert trading talent, for a more reliable approach to your portfolio.

Inverse ETFs

Investors stand to gain from inverse exchange-traded funds or ETFs, making them a good option in a stock market decline. With a chance to profit from major indexes on the downturn, ETFs are an effective investment safety measure.

Research exchange-traded funds for an opportunity to profit during a slump in the market.

Now You’re Ready For A Market Downturn

When it comes to your investments, nobody knows what the future holds. What we can say for sure, however, is that a market downturn is likely, given enough time. And when this happens, you need to be prepared.

Interested in learning more about investments and the exciting world of small business? Check out some of our other articles for everything you need to get ahead.