Many investors are concerned that a downturn is bound to hit the stock market in the next year. Major stock indexes are near all-time highs, valuation ratios are above historical averages, and interest rates look set to rise, pulling capital away from stocks. There are certainly risks swirling around right now, but the right investment strategy will keep you from sweating a potential stock market crash.
1. The next crash might be a long way off
This isn’t the first time that investors have been worried about a crash. Sometimes, those concerns are warranted. The dot-com bubble and the global financial crisis were two incidents that some people saw coming, and it seems obvious that the stock market would tumble in both cases.