The Best Way to Prepare for a 2021 Market Crash
Investors saw a little bit of everything in 2020. The stock market started the year by rising to new highs, only to suffer a lightning-fast bear market plunge that lopped 30% off major market benchmarks in a matter of weeks. Yet the stock market then bounced off its lows during the worst pandemic in a century, returning to record levels and beyond. There's never been a better testament to the value of having a long-term investing mindset.
However, your experience of 2020 might have changed your views on how you want to manage your portfolio. For many, 2020 was the first bear market they'd ever gone through, and even though things turned out for the best, it was still painful to endure. Moreover, there's no guarantee that the next bear market will be just as short.
Preparing for a market crash in 2021 is a smart move, especially right now in the middle of an impressive bull market run for stocks. But if you think I'm telling you to sell off all your stock positions and hide until the market tanks again, think again. Fortunately, there's a better way that doesn't require a crystal ball or perfect timing to offer the protection you need with your long-term investing strategy.
Source Fool.com
