Open any financial news site today and you’ll see the same warnings, over and over. The market is at all-time highs. AI is a giant bubble. It’s 1999 all over again. A crash is coming — maybe next month, maybe next week.
And you know what? They might be right.
A coworker asked me recently, “You’re still putting money into stocks every month? Aren’t you scared it’s all about to fall apart?” It’s a fair question. So let me answer it honestly — because how I handle that fear is, I think, the most important part of my whole plan.
First, an Honest Admission: I Have No Idea
I can’t tell you whether the market will crash. Neither can the loud voices on the news, no matter how confident they sound.
Here’s something I’ve learned: there is always someone predicting a crash. Right now it’s the “AI bubble.” A few years ago it was something else. A few years from now it’ll be a new fear with a new name. Eventually, one of these doomsayers will be right — the market really will fall — and they’ll take a victory lap. But nobody can reliably tell you when.
So I stopped trying to predict it. Instead, I did something that turned out to be far more powerful: I built a plan that doesn’t need me to predict it. A plan where a 20% or even 30% crash wouldn’t break me.
Here’s how it works.
Rule #1: I Only Invest Money I Don’t Need
This is the foundation, and it’s the one most people get wrong.
Every won I put into the market is pure spare money — cash I won’t need to touch for years. It is never my emergency fund. It’s never money for next year’s bills. It’s never borrowed money. I keep a separate cash cushion for life’s surprises, completely untouched by the market.
Why does this matter so much? Because a crash only truly hurts you if it forces you to sell. If the market drops 30% and you suddenly need that money — for rent, for an emergency, for a loan payment — you’re forced to sell at the worst possible moment and lock in the loss.
But if it’s money I won’t need for a decade? Then a crash is just an uncomfortable number on a screen. I can look at it, shrug, and close the app. It can’t force my hand. That single rule removes most of the real danger.
Rule #2: I Zoom Out
I spent years around ships and heavy machinery, and one thing that job taught me is that panic comes from looking at the wrong gauge. In a storm, you don’t stare at every wave — you check your heading and trust the vessel.
Investing is the same. Look at the market day by day and it’s a terrifying rollercoaster. But zoom out to the long-term chart — the one I wrote about in my last post — and every crash in history so far, as brutal as it felt at the time, turned out to be a temporary dip on a long climb upward. The dot-com crash, 2008, the 2020 pandemic drop: all of them looked like the end of the world in the moment, and all of them, eventually, became a small wobble on a rising line.
I have to be honest here: “so far” and “eventually” are doing real work in those sentences. The past does not guarantee the future, and I’d never pretend otherwise. But I’ve made a deliberate bet that the long-term direction of the world’s most productive companies is up — and I’ve set my time horizon in decades, not days.
Rule #3: A Crash Is a Discount, Not a Disaster
Here’s the mental flip that changed everything for me.
Because I invest the same fixed amount every single month — rain or shine, up market or down — I’m a permanent buyer, not a seller. And what does a buyer want? Lower prices.
So when the market crashes, my next monthly investment automatically buys more shares, at a discount. The scary red numbers everyone’s panicking about? For someone who’s still buying, that’s a sale. It’s the same companies, the same future, just cheaper.
I’m not saying a crash feels good — watching your balance drop is never fun. But when you’re a steady monthly buyer, a downturn is quietly working in your favor, stocking you up at bargain prices for the recovery that history suggests will come.
Rule #4: I Keep Enough Cash That I Never Have to Sell
The three rules above are about my head. This one is about arithmetic, and honestly it does more work than the other three combined.
Right now a little under a fifth of my portfolio sits in cash. Every so often I look at that and wince — it’s money doing nothing while the market climbs. But its job isn’t to earn a return. Its job is to make sure that no event in my life ever forces me to sell shares on a day I didn’t choose.
Because here is how people actually get hurt in a crash. It isn’t the fall. It’s the fall arriving at the same time as a job loss, a medical bill, or a family emergency — and having nowhere to get money except the account that just dropped 40%. That’s when a paper loss becomes a permanent one.
A crash can’t hurt a long-term investor who doesn’t have to sell. It can badly hurt one who does. The cash is not an investment decision; it’s the thing that lets my investment decisions stay decisions.
The Real Risk Was Never the Market
After all this, here’s what I’ve come to believe: for a long-term investor using only spare money, the biggest risk isn’t the crash itself.
It’s me.
It’s the temptation to panic-sell at the bottom. It’s the urge to stop investing right when things go on sale. It’s letting a scary headline override a good plan. The market falling is normal and survivable — my own emotions are the thing most likely to actually cost me money.
So my three rules aren’t really about the market at all. They’re about protecting my plan from me. Spare money means I’m never forced to sell. The long view means I don’t panic. And steady monthly buying turns a crash from a threat into an opportunity.
What History Actually Says About Crashes
“The market always recovers” is the reassuring version. It’s also true, and it’s also incomplete in a way I think is dishonest to leave out. Here are the four big declines of the modern era.
| Period | Peak-to-trough fall | How long to get back |
|---|---|---|
| Dot-com, 2000–2002 | about 49% | Did not reclaim the March 2000 peak until 2007 |
| Financial crisis, 2007–2009 | about 57% | Trough in March 2009; back to the old high in 2013 |
| Covid, 2020 | about 34% | The whole fall took roughly a month; recovery took months, not years |
| Rate shock, 2022 | about 25% | Peaked in January 2022, bottomed that October, recovered in January 2024 |
Two honest notes about that table. These are price figures, so they ignore dividends — if you keep reinvesting, you get back to even sooner than the dates suggest. And they say nothing about the years after recovery, which is where the actual returns came from.
But look at the first row again. Someone who invested a lump sum at the very top in March 2000 waited roughly seven years to break even on price. Seven years is not a news cycle. It’s a period long enough to change careers, move house, and give up.
That is the real risk, and it is not “losing your money.” It’s being right eventually and quitting first. Which is precisely why my defence is a cash buffer and an automatic transfer, not a forecast.
What I’ve Already Decided to Do When It Happens
The worst moment to decide how you’ll behave in a crash is during one. So I wrote mine down in advance, and this is it, in full.
1. Keep buying. Change nothing. The automatic transfer runs on the same day for the same amount. I don’t increase it to be clever and I don’t pause it to feel safe. A falling market means the same money buys more shares, which is the entire mechanism by which this works.
2. Stop checking daily. Watching a portfolio fall in real time produces no information and enormous pressure to act. During a serious decline I check monthly, when I write the recap. That’s it.
3. Sell nothing on an unscheduled day. If I ever sell, it will be for a reason I could have written down a year earlier — not because of a headline, a chart, or somebody’s confident thread.
4. Rebalance only on schedule. If the fall pushes my allocation badly out of line, I’ll correct it at my normal review, not in the middle of the drop.
5. Deploy some cash, but only in tranches. This is the one action I permit myself. If markets fall far enough, part of that cash buffer goes in — in pieces, on fixed dates, never all at once, and never enough to compromise the emergency portion. I will be early. Everybody is early. Tranches are how being early stops mattering.
That’s the whole plan. I like that it’s boring, because boring is what I can actually execute while frightened.
Questions I Get Asked
Shouldn’t I just sell now and buy back lower?
That requires being right twice — about when to leave and when to return — and the second one is harder, because markets tend to rebound hardest while the news is still terrible. I’ve never met anyone who did it consistently, and I’m certainly not going to be the first.
How much cash should I hold?
I can’t answer that for you and wouldn’t try. The question I ask myself is not “what percentage is optimal” but “how many months could I cover if my income stopped tomorrow and I refused to sell a single share?” The number that makes you sleep is the right number.
Is a crash coming?
Yes. I don’t know when, and neither does the person telling you they do. Declines are a recurring feature of the thing that produces the returns; they aren’t a malfunction of it. Planning for one is useful. Predicting one is not.
What if I’m close to retirement?
Then this article is the wrong one for you, and my situation isn’t comparable to yours. Everything here assumes a long runway and no need to withdraw. Someone drawing down within a few years faces a genuinely different problem, and that’s a conversation for a qualified adviser in your own country, not a blog written by an engineer.
So — Can I Survive a 30% Crash?
Yes. Honestly, yes.
It would sting to see that number. I’m human. But I wouldn’t sell a single share. I’d keep buying my fixed amount every month, scooping up cheaper shares, and I’d wait — the way you wait out a storm at sea, trusting the vessel you built to hold.
That’s how I control risk. Not by predicting the future — I already admitted I can’t — but by building a plan that doesn’t depend on getting the future right. A crash is not the thing that ends the 6-figure dream. Panicking is. And I’ve quietly designed my whole approach so that I never have to.
A quick, honest note: I’m not a financial advisor, and nothing here is personalized investment advice. Everyone’s situation and risk tolerance is different. I’m just an ordinary person sharing how I think. Please do your own research, and consider speaking with a qualified professional before making any investment decisions.
— Steve