Every way investors limit crash losses, what each one cost and protected in the last four selloffs, when stepping aside helped, and where to go when you do. With a market risk check that updates every trading day.
You protect a portfolio by deciding three things before a crash, not during one: how much loss you can sit through, what would make you reduce risk, and where the money goes when you do. Most losses that hurt investors for good come from getting one of those wrong under pressure: holding more risk than they can stomach, selling at the low, or never getting back in.
The tools fall into two groups. Permanent protection is always on: diversification, a cash or bond allocation, buffer ETFs, put options. You pay for it every year, in lower returns or premiums. Timed protection switches on only when conditions turn: drawdown rules, trend rules such as the 200‑day moving average, and macro regime scores. It costs less in calm years but depends on the signal being early enough and on you following it.
| Tool | What it protects against | What it costs | Where it failed |
|---|---|---|---|
| Diversification | One stock or sector sinking the portfolio | Little; you give up concentration upside | Correlations rise in crashes: most stocks fall together |
| Cash and T‑bills | Any fall, on the part held in cash | Low return (T‑bills: 2.1% a year over the decade in Exent’s data) | Rarely fails; the risk is holding too much for too long |
| Bonds | Recessions and panics, when rates fall | Lower return than stocks | 2022: stocks and bonds fell together |
| Put options and collars | A fall below a set price | Premiums every year, or capped upside | Expensive to keep rolling; timing of expiries |
| Buffer ETFs | The first 10–15% of a fall over an outcome period | Capped upside and fees | Losses beyond the buffer; entering mid‑period |
| Inverse ETFs | Short, sharp falls | Lose value in rising and choppy markets | Daily reset decay when held for months |
| Drawdown and trend rules | Long, grinding bear markets | Whipsaws and missed rebounds | Fast crashes (COVID) hit before the rule reacts |
| Macro regime exits | Deteriorating conditions before or during a bear market | A subscription; time out of the market | Sudden shocks that macro data does not show in advance |
The full comparison, with costs, is in downside protection strategies compared. For a step‑by‑step version, see how to write a market crash plan.
Data through the close of Oct 19, 2026. The S&P 500 fell 1.5% over the last five trading days, and the Nasdaq‑100 fell 3.7%. The S&P 500 is 1.6% below its record close of Oct 6: a small dip from its record. It is 6.1% above its 200‑day average (+8.0% a week earlier). Its 20‑day volatility is 9.6% a year, calmer than 70% of trading days since 2016.
Daily closes over the last year, through Oct 19, 2026. Green: the index above its average; red: below it.
Through Oct 19, 2026. “vs 200‑day avg.” = how far the close sits above or below its 200‑day average.
| Index fund | Last 5 days | Year to date | From its high | vs 200‑day avg. |
|---|---|---|---|---|
| S&P 500 (SPY) | −1.5% | +12.7% | −1.6% | +6.1% |
| Nasdaq‑100 (QQQ) | −3.7% | +17.1% | −5.4% | +7.0% |
| Russell 2000 (IWM) | −2.4% | +10.4% | −11.1% | −1.8% |
| Index fund | S&P 500 (SPY) | Nasdaq‑100 (QQQ) | Russell 2000 (IWM) |
|---|---|---|---|
| Last 5 days | −1.5% | −3.7% | −2.4% |
| Year to date | +12.7% | +17.1% | +10.4% |
| From its high | −1.6% | −5.4% | −11.1% |
| vs 200‑day avg. | +6.1% | +7.0% | −1.8% |
Year‑to‑date return through Oct 19, 2026: what each fund returned next to its multiple times the index’s return. The gap is the daily reset at work.
| Fund | Last 5 days | Year to date | Multiple × index | From its high |
|---|---|---|---|---|
| 2× S&P 500 (SSO) | −3.1% | +20.8% | +25.4% | −3.7% |
| 3× S&P 500 (UPRO) | −4.6% | +28.4% | +38.1% | −6.0% |
| 2× Nasdaq‑100 (QLD) | −7.5% | +27.5% | +34.2% | −10.9% |
| 3× Nasdaq‑100 (TQQQ) | −11.3% | +34.2% | +51.3% | −19.0% |
| 3× Russell 2000 (TNA) | −7.4% | +16.8% | +31.2% | −50.6% |
| 3× chip stocks (SOXL) | −23.2% | +134.7% | +200.3% | −67.2% |
Returns through Oct 19, 2026, dividends and interest included.
| Asset | Last 5 days | 1 month | Year to date | 1 year |
|---|---|---|---|---|
| T‑bills, 1–3 months (BIL) | +0.1% | +0.1% | +1.4% | +2.3% |
| Treasuries, 1–3 years (SHY) | +0.2% | −0.1% | −0.7% | +0.3% |
| Treasuries, 7–10 years (IEF) | +0.7% | −1.0% | −5.1% | −4.4% |
| Treasuries, 20+ years (TLT) | +1.8% | −1.7% | −7.5% | −8.6% |
| US bond market (AGG) | +0.5% | −0.9% | −3.5% | −2.8% |
| Gold (GLD) | −0.6% | −4.8% | −4.2% | +3.7% |
| Min‑volatility stocks (USMV) | +0.5% | +1.7% | +8.0% | +7.2% |
| −1× S&P 500 (SH) | +1.6% | −0.9% | −9.9% | −10.7% |
Last updated Oct 19, 2026. Members only.
| Exent regime pillar | Today |
|---|---|
| Liquidity | |
| Credit stress | |
| Economic cycle | |
| Sentiment | |
| Regime: Risk ON · Neutral · Risk OFF |
Price trend and volatility show what the market has already done. Exent’s macro regime score reads the backdrop behind it (liquidity, credit stress, the economic cycle and sentiment) and classifies it as Risk ON, Neutral or Risk OFF. Market intel members see today’s reading and get an alert when it changes.
The S&P 500 fell between 19% and 34% in each of the four big selloffs since 2018, and it took between four months and two years to get back to its old high. The table uses daily closes of the SPY fund (price only).
| Selloff | S&P 500 peak | Trough | Fall | Back to the peak |
|---|---|---|---|---|
| Q4 2018 selloff | Sep 20, 2018 | Dec 24, 2018 | −20.2% | Apr 29, 2019 |
| COVID crash, 2020 | Feb 19, 2020 | Mar 23, 2020 | −34.1% | Aug 18, 2020 |
| 2022 bear market | Jan 3, 2022 | Oct 12, 2022 | −25.4% | Jan 19, 2024 |
| 2025 tariff selloff | Feb 19, 2025 | Apr 8, 2025 | −19.0% | Jun 27, 2025 |
Riskier holdings fell much further. A 2× S&P 500 fund lost more than half its value in the COVID crash, and 3× funds lost three quarters. These are each fund’s largest peak‑to‑trough fall inside the selloff, in Exent’s data (Jul 2016 – Sep 2026):
| Fund | Q4 2018 | COVID 2020 | 2022 bear | 2025 tariffs |
|---|---|---|---|---|
| S&P 500 (SPY) | −19.3% | −33.7% | −24.5% | −18.8% |
| Nasdaq‑100 (QQQ) | −22.8% | −28.6% | −34.8% | −22.8% |
| 2× S&P 500 (SSO) | −36.5% | −59.3% | −46.7% | −35.1% |
| 3× S&P 500 (UPRO) | −50.3% | −76.8% | −63.9% | −48.9% |
| 2× Nasdaq‑100 (QLD) | −42.3% | −51.7% | −63.1% | −41.8% |
| 3× Nasdaq‑100 (TQQQ) | −57.9% | −69.9% | −80.9% | −56.7% |
A fall of 80% needs a 400% gain to get back to even, which is why the losses of leveraged ETFs in a crash matter more than their average return. See also how often the market crashes.
Of the assets investors hold to wait out a fall, only short‑term T‑bills gained in all four selloffs; every other “safe” asset lost money at least once. The table shows what each returned between the S&P 500’s peak and its trough.
| Asset | Q4 2018 | COVID 2020 | 2022 bear | 2025 tariffs |
|---|---|---|---|---|
| S&P 500 (SPY), price | −20.2% | −34.1% | −25.4% | −19.0% |
| T‑bills (BIL) | +0.5% | +0.3% | +0.6% | +0.6% |
| 1–3y Treasuries (SHY) | +1.2% | +2.1% | −4.4% | +1.3% |
| 7–10y Treasuries (IEF) | +3.4% | +6.4% | −15.4% | +2.7% |
| Long Treasuries (TLT) | +4.5% | +14.2% | −29.3% | +0.8% |
| US bonds (AGG) | +1.4% | −1.3% | −14.4% | +0.9% |
| Gold (GLD) | +5.0% | −3.6% | −7.3% | +1.6% |
| Min‑volatility US stocks (USMV) | −12.5% | −33.0% | −17.3% | −8.6% |
| −1× S&P 500 (SH) | +23.8% | +42.3% | +27.8% | +23.1% |
Long Treasuries are the clearest example: a strong hedge when the Fed cuts rates in a panic (+14.2% in the COVID crash), a loss when inflation forces rates up (−29.3% in 2022). Gold fell in the COVID crash and in 2022. Inverse funds such as SH rose in every selloff, but they are a bet on the fall rather than a place to wait: SH lost 12.8% a year over the whole period. More on each: cash, T‑bills or bonds when you step aside, bonds as a hedge, gold as a hedge.
Staying invested has the better record for most people, because the biggest up days cluster inside the selloffs. In Exent’s data (Jul 2016 – Sep 2026), missing the 10 best days cut the S&P 500’s return from 15.2% to 8.2% a year, and missing the 20 best cut it to 4.9%.
The same data shows why stepping aside can still work. All 10 of those best days came while the index was already below its 200‑day average, and 8 of them came within two weeks of one of the 10 worst days. An investor who stepped aside once a downturn was under way missed both: skipping the 10 best and the 10 worst days together left the return at 15.5% a year, slightly higher, with much smaller losses. The question is never “in or out” on a whim; it is which rule you follow, and whether it gets you back in.
For the S&P 500 itself, a simple exit rule mostly traded return for smaller losses. For leveraged funds it changed the outcome. In this hypothetical backtest (Jan 2017 – Sep 2026), each fund was held while its index closed above its 200‑day average and swapped for T‑bills while it was below; no trading costs or taxes are included.
| Fund | Hold: a year | Hold: worst fall | 200‑day rule: a year | Rule: worst fall | Time invested |
|---|---|---|---|---|---|
| S&P 500 (SPY) | 15.1% | −33.7% | 10.3% | −19.2% | 82% |
| Nasdaq‑100 (QQQ) | 21.4% | −35.1% | 19.2% | −21.9% | 83% |
| 2× S&P 500 (SSO) | 23.6% | −59.3% | 16.2% | −36.7% | 82% |
| 3× S&P 500 (UPRO) | 28.0% | −76.8% | 20.6% | −52.2% | 82% |
| 2× Nasdaq‑100 (QLD) | 34.3% | −63.7% | 33.2% | −40.2% | 83% |
| 3× Nasdaq‑100 (TQQQ) | 42.5% | −81.6% | 46.4% | −54.8% | 83% |
The rule cut the worst fall of every fund by roughly a third or more. On the S&P 500 it also cut the return, from 15.1% to 10.3% a year, because it switched 58 times and often sold near lows. On TQQQ the return was higher with the rule (46.4% vs 42.5% a year) because avoiding most of the 2022 collapse mattered more than the rebounds it missed. Past results, and a simple rule; the details are in TQQQ and the 200‑day moving average and when it is safe to hold leveraged ETFs.
| Your question | Short answer |
|---|---|
| When should I step aside from the market? | When a rule you set in advance says so, with a re‑entry rule too |
| Should I sell before a crash? | All‑out selling on a forecast has a poor record; partial, rule‑based de‑risking holds up better |
| Is a crash coming? | Nobody knows the date; this week’s conditions are measurable |
| What do I do while it crashes? | Check your plan, your cash needs and your exposure before acting |
| When do I get back in? | Decide the condition before you sell; waiting for calm usually costs the rebound |
| How do I write a crash plan? | Three rules by market regime, written down |
| When is it safe to hold TQQQ or SSO? | Only with an exit rule; the drawdown is the risk |
| Can I hold TQQQ long term? | It returned more, with an 82% fall along the way |
| Cash or bonds when I step aside? | Short T‑bills were the only parking place that gained in all four selloffs |
| How do I build a lower‑risk portfolio? | Nine mixes compared on return, volatility and worst fall |
| How do I protect my 401(k)? | The plan menu limits you; the stable‑value and bond funds are the levers |
| How do I protect retirement savings? | Cash for near‑term spending, then rules for the rest |
| Are buffer ETFs worth it? | Smaller falls, smaller gains, and higher fees |
| What if my portfolio is down 20%? | Drawdown rules, set before the fall, by how much you can lose |
| Which tools tell me when to step aside? | Free trend indicators, research services and regime scores compared |
Related guides: how to hedge a stock portfolio, what a market regime is, risk‑on vs risk‑off positioning, when to own high‑beta stocks.
| Scenario | What the page measures |
|---|---|
| When the Fed raises rates | Stocks, bonds, cash and leveraged ETFs through past hiking runs |
| When the Fed cuts rates | The year after each first cut, calm cuts vs emergency cuts |
| In a recession | A recession vs a bear market without one |
| In a tariff shock | First day, worst point and three months after each announcement |
| If the AI bubble bursts | Past tech and chip selloffs, and how long recovery took |
| When oil prices spike | What held up in past oil shocks |
| On Fed decision days | Every Fed decision since 2016: the day and the week after |
| On CPI release days | Every CPI release since 2016: the day and the biggest moves |
There is no single best way. Investors combine a risk level they can hold through a 30% fall, a cash or T-bill reserve, and a rule written in advance for when to reduce risk and when to add it back. Hedges such as puts or buffer ETFs cost money every year.
In Exent’s data, short-term T-bills were the only parking place that gained in all four selloffs since 2018. Long Treasuries rose in the 2020 crash but fell 29.3% in 2022, gold fell in 2020 and 2022, and inverse funds rose in every selloff but lost money over the whole period.
Going all to cash on a forecast has a poor record, because the best days often come right after the worst. Rule-based de-risking, partial or with a clear re-entry condition, holds up better than selling on fear.
The S&P 500 fell 34.1% from February 19 to March 23, 2020, and 25.4% in 2022. A 2x S&P 500 fund lost 59.3% in the 2020 crash and a 3x Nasdaq-100 fund lost 80.9% in the 2022 bear market, in Exent’s data.
More than anything else. Their losses compound: TQQQ fell 81.6% from November 2021 to December 2022. In a hypothetical backtest, holding it only while the Nasdaq-100 was above its 200-day moving average limited the 2022 fall to 46.3%, and the worst fall over the whole test to 54.8% (in the 2020 crash).
A single reading that classifies market conditions, usually as risk-on, neutral or risk-off, from several families of data. Exent’s regime model reads four pillars: liquidity, credit stress, the economic cycle and sentiment.
Exent Predictive Market Intelligence reads the macro regime every day and tells you when it changes.
Educational content, not investment advice. Examples are illustrative; past performance does not guarantee future results.