A fill‑in plan in seven steps: the dollar loss you could face, the cash you need, what you hold in each kind of market, your triggers, your way back in, which accounts to use, and when to review it. With an illustrative plan for a $750,000 portfolio.
A market crash plan is a short written set of decisions about what you will do when stocks fall hard, made while they are not falling. It turns a stressful judgment call into a checklist. The plan does not predict the next crash; it decides how much of one you can absorb and what you do at each stage.
It has seven parts:
A crash plan is one part of portfolio protection. For the checklist version of getting ready, see how to prepare for a market crash.
Data through the close of Oct 20, 2026. The S&P 500 fell 1.2% over the last five trading days, and the Nasdaq‑100 fell 3.5%. The S&P 500 is 1.3% below its record close of Oct 6: a small dip from its record. It is 6.4% above its 200‑day average (+7.9% a week earlier). Its 20‑day volatility is 9.4% a year, calmer than 71% of trading days since 2016.
Daily closes over the last year, through Oct 20, 2026. Green: the index above its average; red: below it.
Through Oct 20, 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) | −1.2% | +13.1% | −1.3% | +6.4% |
| Nasdaq‑100 (QQQ) | −3.5% | +17.0% | −5.5% | +6.8% |
| Russell 2000 (IWM) | −0.3% | +12.2% | −9.6% | −0.3% |
| Index fund | S&P 500 (SPY) | Nasdaq‑100 (QQQ) | Russell 2000 (IWM) |
|---|---|---|---|
| Last 5 days | −1.2% | −3.5% | −0.3% |
| Year to date | +13.1% | +17.0% | +12.2% |
| From its high | −1.3% | −5.5% | −9.6% |
| vs 200‑day avg. | +6.4% | +6.8% | −0.3% |
Last updated Oct 20, 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.
Start with what the last crashes did, then apply it to your own money. The S&P 500’s four big selloffs since 2018, on daily closes:
| 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 |
A percentage is abstract; a dollar figure is not. The table applies each mix’s largest fall in two of those selloffs (Jul 2016 – Sep 2026, rebalanced monthly) to a $750,000 portfolio:
| Illustrative: $750,000 in… | Fall, COVID 2020 | Dollar loss | Fall, 2022 bear | Dollar loss |
|---|---|---|---|---|
| 100% S&P 500 | −33.7% | $252,750 | −24.5% | $183,750 |
| 80% S&P 500 / 20% bonds | −27.7% | $207,750 | −22.4% | $168,000 |
| 60% S&P 500 / 40% bonds | −21.5% | $161,250 | −20.5% | $153,750 |
| 50% S&P 500 / 50% T‑bills | −17.4% | $130,500 | −12.5% | $93,750 |
Your own holdings will differ from an index. Concentrated, high‑beta or leveraged positions fell much further, so the replay should use what you actually own. A useful number is which holdings cause most of the loss in bad months; see crash liability. Then write down the largest dollar loss you could sit through without selling in a panic.
Cash needs. List what you will withdraw over the next one to two years and hold it outside stocks, in T‑bills or a money market fund. Then a fall never forces a sale at the low. Short T‑bills gained in all four selloffs in the study; long bonds did not (long Treasuries fell 29.3% in the 2022 bear market). This matters most near retirement: sequence‑of‑returns risk.
Holdings by regime. Write three mixes, not one. A risk‑on mix for supportive conditions, a neutral mix for mixed ones, and a risk‑off mix for deteriorating ones. Each is a level of exposure, so moving between them is a step rather than a leap. How investors read those conditions is explained in what a macro regime score is.
Triggers. A trigger is a condition you can check without judgment: the portfolio is 15% below its high, the S&P 500 closed below its 200‑day average, or your regime reading changed. Pair each trigger with one action, usually moving one mix down. Ways to set the levels are in drawdown rules and when to step aside from the market.
Re‑entry. Decide how you will get back in before you get out. The strongest days tend to come inside a selloff. In April 2025 the S&P 500 rose more than 9.5% in a day, its best day since 2008 (Yahoo Finance), a week after the tariff announcement. In Exent’s data, missing the 10 best days from mid‑2016 to 2026 cut the index’s return from 15.2% to 8.2% a year. A longer study points the same way: J.P. Morgan Asset Management’s 2025 Guide to Retirement found that missing the 10 best days over 20 years cut the annualized return by almost half. Common re‑entry rules are a condition clearing (the trigger reverses), a schedule (back in thirds over a few weeks), or both. More in when to get back into the market.
Accounts and taxes. In a taxable account every sale can realize a capital gain, and gains on positions held a year or less are taxed as ordinary income. Many investors make their shifts inside an IRA or 401(k), where trades are not taxed, and leave long‑held taxable positions alone. If you sell at a loss to harvest it, the wash‑sale rule can disallow the loss if you buy the same holding back too soon.
Write it down and review it. One page, in plain words, kept where a spouse or partner can find it. Review it twice a year on fixed dates and after any change in income, health or spending, never in the middle of a selloff.
Illustrative only, not advice: a couple in their late 50s with $750,000, currently 80% in stocks and 20% in bonds, drawing $50,000 a year. The numbers show the format; your own levels depend on your goals, taxes and how much loss you can live with.
| Step | Illustrative entry |
|---|---|
| 1. Dollar loss | A 2020 replay of today’s 80/20 mix: about −$208,000. The most we accept: $150,000. |
| 2. Cash needs | Two years of withdrawals, $100,000, in T‑bills; the other $650,000 follows the mixes below. |
| 3. Holdings by regime | Risk‑on: 80% stocks / 20% bonds and T‑bills. Neutral: 60/40. Risk‑off: 40% stocks / 60% T‑bills. |
| 4. Drawdown triggers | Portfolio 10% below its high: reread the plan, no trades. 15% below, or the regime reading turns down: move one mix down. |
| 5. Re‑entry rule | When the trigger reverses, move back one mix, in thirds over six weeks. |
| 6. Accounts and taxes | All shifts inside the IRA; taxable account untouched; no leveraged funds. |
| 7. Review | January and July, and after any change in income, health or spending. |
A short written set of decisions made before a fall: how much you could lose in dollars, the cash you need, what you hold in each kind of market, what triggers a change, how you get back in, and which accounts the changes happen in.
Measure the dollar loss your portfolio would have taken in past crashes, hold one to two years of withdrawals outside stocks, and write down in advance the conditions under which you will reduce risk and add it back.
A common approach is one to two years of planned withdrawals in T-bills or a money market fund, so a fall never forces a sale at the low. Short T-bills gained in all four S&P 500 selloffs since 2018 in Exent’s data.
Selling everything on a forecast has a poor record, because the best days tend to come during selloffs. A plan with partial steps and a written re-entry rule avoids having to be right twice.
When the condition written in your plan clears, for example the trigger that took you out reversing, often in stages over a few weeks. Deciding this before you sell is the point of the plan.
Twice a year on fixed dates, and after any change in income, health or spending. Reviewing it during a selloff defeats its purpose.
Market Intelligence reads the market regime and tells you whether the backdrop favors taking risk or protecting capital.
Educational content, not investment advice. Examples are illustrative; past performance does not guarantee future results.