When Should You Step Aside From the Stock Market?
The four kinds of step‑aside triggers investors use, what each one missed, and why every exit needs a re‑entry rule. With a market risk check that updates every trading day.
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Cash, T‑Bills or Bonds: Where to Go When You Step Aside
What each place to wait out a selloff did in the last four crashes and over ten years, why bonds protected in some falls and not in others, and what waiting costs. With a defensive‑asset check that updates every trading day.
Key takeaways
- Short T‑bills were the only parking place that gained in all four big selloffs since 2018, between +0.3% and +0.6% each time. Bonds and gold each lost money in at least one (Exent’s data, Jul 2016 – Sep 2026).
- Whether bonds protect depends on why stocks fall. Long Treasuries (TLT) rose 14.2% in the COVID crash, when rates fell, and lost 29.3% in the 2022 bear market, when inflation pushed rates up.
- In calendar 2022 the S&P 500 lost 18.2%, US bonds (AGG) 13.0% and long Treasuries 31.2%, while T‑bills gained 1.4%.
- Waiting has a price: T‑bills returned 2.1% a year from mid‑2016 to Sep 2026, against 15.2% for the S&P 500. Most of that cost comes from missing the rebound, not from the parking place.
- T‑bills can be held directly, in a government money market fund or in a T‑bill ETF such as BIL or SGOV. For a few months of waiting, the choice is mostly about access, insurance and taxes.
In this article
- Cash or bonds: where should money go when you step aside from stocks?
- Market risk check, updated every trading day
- What decides whether bonds protect you in a crash?
- How did each option do over the whole period?
- T‑bills, money market funds or a T‑bill ETF: which is best for waiting?
- What does waiting in cash cost?
Cash or bonds: where should money go when you step aside from stocks?
For money moved out of stocks to wait out a fall, short Treasury bills have had the cleanest record: they gained a little in each of the last four big selloffs. Bonds did better than bills in some crashes and much worse in others, because their price depends on interest rates. Gold behaved like a separate risky asset, not a parking place.
“Stepping aside” here means moving part of a portfolio out of stocks for weeks or months, by a rule or a decision made in advance. When to do it is covered in when to step aside from the market; how it fits with other tools is in the portfolio protection guide. The table shows what each option returned between the S&P 500’s peak and its trough in each selloff (Jul 2016 – Sep 2026).
| 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% |
- S&P 500 (SPY), price
- Q4 2018
- −20.2%
- COVID 2020
- −34.1%
- 2022 bear
- −25.4%
- 2025 tariffs
- −19.0%
- T‑bills (BIL)
- Q4 2018
- +0.5%
- COVID 2020
- +0.3%
- 2022 bear
- +0.6%
- 2025 tariffs
- +0.6%
- 1–3y Treasuries (SHY)
- Q4 2018
- +1.2%
- COVID 2020
- +2.1%
- 2022 bear
- −4.4%
- 2025 tariffs
- +1.3%
- 7–10y Treasuries (IEF)
- Q4 2018
- +3.4%
- COVID 2020
- +6.4%
- 2022 bear
- −15.4%
- 2025 tariffs
- +2.7%
- Long Treasuries (TLT)
- Q4 2018
- +4.5%
- COVID 2020
- +14.2%
- 2022 bear
- −29.3%
- 2025 tariffs
- +0.8%
- US bonds (AGG)
- Q4 2018
- +1.4%
- COVID 2020
- −1.3%
- 2022 bear
- −14.4%
- 2025 tariffs
- +0.9%
- Gold (GLD)
- Q4 2018
- +5.0%
- COVID 2020
- −3.6%
- 2022 bear
- −7.3%
- 2025 tariffs
- +1.6%
Every bond fund lost money in the 2022 bear market, and the longer its maturities, the more it lost. Aggregate bonds (AGG), which include corporate debt, also slipped in the COVID crash. Gold fell in two of the four selloffs.
Market risk check, updated every trading day
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.
The S&P 500 vs its 200‑day average
Daily closes over the last year, through Oct 19, 2026. Green: the index above its average; red: below it.
−1.6%from its record closeRecord: Oct 6, 2026
+6.1%vs its 200‑day averageA week earlier: +8.0%
9.6%20‑day volatility (a year)Median since 2016: 12.2%
−1.5%last five trading daysNasdaq‑100: −3.7%
Where money goes when investors step aside
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% |
- T‑bills, 1–3 months (BIL)
- Last 5 days
- +0.1%
- 1 month
- +0.1%
- Year to date
- +1.4%
- 1 year
- +2.3%
- Treasuries, 1–3 years (SHY)
- Last 5 days
- +0.2%
- 1 month
- −0.1%
- Year to date
- −0.7%
- 1 year
- +0.3%
- Treasuries, 7–10 years (IEF)
- Last 5 days
- +0.7%
- 1 month
- −1.0%
- Year to date
- −5.1%
- 1 year
- −4.4%
- Treasuries, 20+ years (TLT)
- Last 5 days
- +1.8%
- 1 month
- −1.7%
- Year to date
- −7.5%
- 1 year
- −8.6%
- US bond market (AGG)
- Last 5 days
- +0.5%
- 1 month
- −0.9%
- Year to date
- −3.5%
- 1 year
- −2.8%
- Gold (GLD)
- Last 5 days
- −0.6%
- 1 month
- −4.8%
- Year to date
- −4.2%
- 1 year
- +3.7%
- Min‑volatility stocks (USMV)
- Last 5 days
- +0.5%
- 1 month
- +1.7%
- Year to date
- +8.0%
- 1 year
- +7.2%
- −1× S&P 500 (SH)
- Last 5 days
- +1.6%
- 1 month
- −0.9%
- Year to date
- −9.9%
- 1 year
- −10.7%
Exent macro regime score, today
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.
What decides whether bonds protect you in a crash?
The cause of the selloff decides it. When stocks fall because growth is collapsing and interest rates are expected to drop, high‑quality government bonds tend to rise, because bond prices go up when rates fall. When stocks fall because inflation forces rates higher, bonds can fall at the same time, because higher rates push bond prices down too.
2020 was the first kind of crash and 2022 the second. The calendar year 2022 shows the damage by maturity, total return:
| Calendar 2022 | Return | What it holds |
|---|---|---|
| S&P 500 (SPY) | −18.2% | Large US stocks |
| T‑bills (BIL) | +1.4% | Treasury bills, 1–3 months |
| 1–3y Treasuries (SHY) | −3.9% | Short Treasury notes |
| US bonds (AGG) | −13.0% | Treasuries, mortgages and corporate bonds |
| 7–10y Treasuries (IEF) | −15.2% | Intermediate Treasuries |
| Long Treasuries (TLT) | −31.2% | Treasuries maturing in 20+ years |
| Gold (GLD) | −0.8% | Gold bullion |
The longer the bond, the more its price moves when rates change. That is why long Treasuries are both the strongest crash hedge in a panic and the worst place to wait in a rate shock. A May 2026 Yahoo Finance Chart of the Day, drawing on Morgan Stanley research, made the same point: bonds have been less reliable shock absorbers when inflation runs hot, though they may still cushion a growth or recession scare. The history of the stock‑bond link is in do bonds still hedge stocks.
How did each option do over the whole period?
Over the full Jul 2016 – Sep 2026 window, T‑bills earned little but never fell more than 0.3%, while long Treasuries lost money and had a deeper fall than stocks. Buy and hold, dividends and interest reinvested:
| Fund | Return a year | Volatility | Worst fall | Worst fall dates |
|---|---|---|---|---|
| T‑bills (BIL) | 2.1% | 0.4% | −0.3% | Jul 2026 → Aug 2026 |
| 1–3y Treasuries (SHY) | 1.4% | 1.6% | −5.9% | Mar 2021 → Oct 2022 |
| 7–10y Treasuries (IEF) | -0.2% | 6.6% | −23.9% | Aug 2020 → Oct 2023 |
| Long Treasuries (TLT) | -3.0% | 14.8% | −48.4% | Aug 2020 → Oct 2023 |
| US bonds (AGG) | 0.9% | 5.4% | −18.4% | Aug 2020 → Oct 2022 |
| Gold (GLD) | 11.4% | 16.4% | −26.4% | Jan 2026 → Jul 2026 |
- T‑bills (BIL)
- Return a year
- 2.1%
- Volatility
- 0.4%
- Worst fall
- −0.3%
- Worst fall dates
- Jul 2026 → Aug 2026
- 1–3y Treasuries (SHY)
- Return a year
- 1.4%
- Volatility
- 1.6%
- Worst fall
- −5.9%
- Worst fall dates
- Mar 2021 → Oct 2022
- 7–10y Treasuries (IEF)
- Return a year
- -0.2%
- Volatility
- 6.6%
- Worst fall
- −23.9%
- Worst fall dates
- Aug 2020 → Oct 2023
- Long Treasuries (TLT)
- Return a year
- -3.0%
- Volatility
- 14.8%
- Worst fall
- −48.4%
- Worst fall dates
- Aug 2020 → Oct 2023
- US bonds (AGG)
- Return a year
- 0.9%
- Volatility
- 5.4%
- Worst fall
- −18.4%
- Worst fall dates
- Aug 2020 → Oct 2022
- Gold (GLD)
- Return a year
- 11.4%
- Volatility
- 16.4%
- Worst fall
- −26.4%
- Worst fall dates
- Jan 2026 → Jul 2026
Long Treasuries (TLT) returned −3.0% a year and fell 48.4% from August 2020 to October 2023, a loss they had not recovered by Sep 2026. T‑bills (BIL) returned 2.1% a year with almost no swings. Gold returned 11.4% a year but had its own 26.4% fall in 2026, which is why it works better as a small diversifier than as the place to wait.
T‑bills, money market funds or a T‑bill ETF: which is best for waiting?
All three hold very short US government debt, so they behaved almost the same in crashes. The differences are how you hold them, how fast you can get the money back, and taxes.
| Option | How it works | Access | Main risk |
|---|---|---|---|
| Treasury bills, held directly | Terms of 4 to 52 weeks, $100 minimum; federal tax on the interest, no state or local tax | Hold to maturity or sell through a broker | Small price moves if sold early |
| Government money market fund | Holds short Treasury and agency debt; aims for a stable $1 share price | Usually next business day | Not FDIC insured; very low fund risk historically |
| T‑bill ETF (BIL, SGOV) | A fund of bills that trades on an exchange like a stock | Any trading day | Small price moves and an expense ratio |
| Bank savings or CDs | A deposit at a bank | Same day; CD penalties apply | Amounts above the FDIC limit |
Bill terms and tax treatment are from TreasuryDirect. In Exent’s data, the 0–3 month bill fund SGOV, which started in May 2020, had the same worst dip as BIL: 0.3%. For larger sums, FDIC and SIPC limits and the 2008 money‑fund episode are explained in where to keep a large cash balance.
What does waiting in cash cost?
The cost is the return you give up, and most of it comes from the rebound. Over Jul 2016 – Sep 2026, T‑bills returned 2.1% a year and the S&P 500 15.2%. Missing just the 10 best days cut the index to 8.2% a year, and all 10 of those days came while it was below its 200‑day average, during or just after the selloffs.
Higher short‑term rates lower the cost but do not remove it. T‑bills returned 5.0% in 2023 and 5.2% in 2024, while the S&P 500 returned 26.2% and 24.9%. Illustrative: moving $300,000 of a $750,000 portfolio to bills for a year in which stocks rise 20% and bills pay 5% gives up about $45,000. In a taxable account, selling stocks to step aside can also realize capital gains. More on cash itself in is cash a good hedge.
- Decide how much moves, not just whether: stepping aside with part of a portfolio limits the cost of being wrong.
- Match the parking place to the risk: T‑bills held up in every selloff here; longer Treasuries helped only when rates fell.
- Write down the condition for getting back in before you sell.
- Check the tax cost of selling in a taxable account first.
How cash compares with puts, buffer funds and exit rules is in downside protection strategies compared.
How to know when to step aside with Exent
- Exent Predictive Market Intelligence publishes a daily macro regime score (Risk ON, Neutral or Risk OFF) built on four pillars: liquidity (how much money is flowing), credit stress (how strained borrowing is), the economic cycle (where growth stands) and sentiment (how investors feel).
- Members get an alert when the regime changes, plus a daily macro briefing with cited sources and an events calendar.
- Six model allocations show how exposure can follow the regime, from fully invested to fully in cash, with a graduated model in between.
Frequently asked questions
Short T-bills were steadier. In Exent’s data they gained in all four selloffs since 2018, while long Treasuries rose 14.2% in the 2020 crash but fell 29.3% in the 2022 bear market. Bonds were safer only when interest rates fell.
For money that must not fall, investors usually use Treasury bills, a government money market fund or insured bank deposits within FDIC limits. These hold their value but earn little, and they do not rise when stocks crash.
When the fall comes with rising rates and inflation, as in 2022, yes: T-bills gained 1.4% that year while US aggregate bonds lost 13.0%. In a panic where rates are cut, as in early 2020, longer Treasuries gained more.
Both hold very short government debt. A T-bill ETF trades on an exchange at a price that can move slightly, while a government money market fund aims to keep a stable $1 share price. Neither is FDIC insured.
Not reliably. In Exent’s data gold rose during the 2018 and 2025 selloffs but fell 3.6% during the COVID crash and 7.3% during the 2022 bear market.
From July 2016 to September 2026, T-bills returned 2.1% a year against 15.2% for the S&P 500. The bigger risk is missing the rebound: skipping the 10 best days cut the index return to 8.2% a year.
Know when to hold the index, and when to step aside.
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Educational content, not investment advice. Examples are illustrative; past performance does not guarantee future results.