What to Do During a Market Crash
The plain answer
Section titled “The plain answer”A crash is a fast, large drop in prices. The useful move is almost never a brand-new strategy. Check that you can pay bills without selling, then follow the allocation you already chose.
If you do not have a written allocation, write one after the dust settles, not during the fastest hour of selling.
How it actually works
Section titled “How it actually works”Crashes mix falling prices with bad liquidity. Spreads widen. Headlines get louder. That combination pushes people to sell so the feeling stops, which can lock in the loss.
Rebalancing can mean buying more stocks after they fall, using money from bonds or new contributions. That feels wrong and is how a target mix is maintained.
Selling everything “to wait for calm” requires two correct calls: the sale and the repurchase. Most people miss the second.
What this means for you
Section titled “What this means for you”On day one, open the checking and savings accounts, not the brokerage chart. Confirm rent, food, and minimum payments are covered. If they are not, that is a cash problem. Use the emergency fund.
If they are covered, leave the long-term accounts on autopilot unless your IPS says to rebalance. Turn off price alerts. Read Why You Should Probably Stop Checking Your Portfolio.
Do not buy a concentrated bet because it “looks cheap.” Cheap can get cheaper.
Common mistakes
Section titled “Common mistakes”Selling a diversified portfolio to buy the one stock that is falling faster.
Borrowing on a card to “buy the dip” and creating high interest debt.
Making a large taxable sale without asking what tax you will owe.
Related pages
Section titled “Related pages”Educational content, not personalized financial, tax, or legal advice. No affiliate relationships. Figures are for tax year 2026 and change annually.Read the full disclaimer.