5 Tips On How to Survive a Stock Market Crash

5 proven strategies to survive the 2025 stock market crash. Learn to manage expenses, avoid panic selling, and capitalize on market downturns from experienced investors.

FIRE

4/19/20259 min read

Introduction

It felt like such a lifetime ago when everything was calm, the grass was green, and we all woke up like nothing was happening to enjoy our morning coffees or lattes. On April 2nd or as he likes to call it “Liberation Day”, The President of the United States of America announced that he would be applying a baseline 10% tariff on all imported goods in the USA. He would also be applying reciprocal tariffs on 60 countries, essentially starting a global trade war (who knew so much could happen in 2 weeks).

Following this, the global stock market felt nervous, as investors were worried that a global trade war would lead to a sharp increase in prices and affect consumers. According to the Canadian Chambers of Commerce, If a 25% tariff were to go into effect, that would cost a Canadian household on average $1,900 on an annual basis. A shock like this would affect consumers greatly, and consequently businesses, resulting in the stock market starting to go into a huge freefall.

For example, in just two days, the S&P 500 fell by almost 11%, which is its worst performance since the COVID pandemic.

Since we have been investing for almost 5 years now, it’s just another day for us. However, we realized that many of our readers are new investors and may be significantly stressed over the events going on right now. So, we wanted to give you some advice to help you feel better (even if only slightly), and provide some tips on how to survive this and future market downturns.

5 Tips on How to Survive a Stock Market Crash

  1. Reduce Expenses

With a potential recession and global trade war coming to Canada, now is a great time to advise you to try to cut expenses where you can. Tariffs are effectively a tax and as a result, businesses and consumers will pay more for the things we all buy. It would be a good idea to review your budget and try to find items that you can get rid of (or can live without), or find cheaper alternatives. During times of uncertainty, having more money in your pocket would definitely be helpful.

  1. Understanding Thy Self

I want you to take a deep breath and reflect on how you feel right now. Are you Stressed? Or Worried? This is important to take note because how you feel is a great way to assess how much risk you can handle.

Many new investors just throw their money into whatever portfolio they like. They may invest based on research, or simply just based on emotions. This could be an effective strategy when the stock market is going up. In fact, most strategies work in a bull market. However, those same people tend to be the first ones to sell when a market downturn occurs, like the one we are going through now.

Always understand what you’re invested/investing in and make sure it’s appropriate for your risk tolerance, so, when bad times come, you’re less likely to freak out and sell. Speaking of selling…

  1. Don’t Sell

The number one rule you need to follow during a stock market crash is “DON’T PANIC SELL”.

Don’t get us wrong, there are times when you need to sell an investment. However, the decision to do so should be based on a sound rationale such as the company is now overvalued, or has moved away from its core thesis. It could also be that you need the cash, or have found a better alternative. However, many people sell during a down market due to fear of loss. They see losses accumulating in their accounts, and get out of the market to avoid any further pain.

It is important to remember that you had an investment strategy before this happened. This is just a bump in the road on the journey to your final destination. Selling as the market goes down only guarantees a loss. Based on market history holding on guarantees a eventual recuperation of those losses, and a gain long term. Our advice is to stick to your strategy, don’t succumb to the fear, and don’t sell.

  1. Keep Buying

While you freak out about the money you’ve lost already in the market your default emotional response is to want to sell. Surprisingly enough, our advice to you right now is the opposite… buy more stock. If you have cash, now may be a good time to deploy it. If you don’t, wait until your next paycheck, and continue your DCA strategy.

I know you probably think we’re crazy, but hear us out. The stock market historically does not go down as often as people think it does. For example, the S&P 500 normally enters a bear market (20% decline or more) once every three and a half years. That means that these declines do not happen often, so it’s a great time to capitalize, and buy when you can.

Think of a store or product you really like, but its super expensive. Now imagine that once every three and a half years, they had a sale where prices went down by 20%, or more. Wouldn’t you want to capitalize on that opportunity? Wouldn’t you buy more of the product than you normally would on any other day?

The same rationale goes for the stock market, try to buy more when the sale comes.

  1. What We Are Doing?


Absolutely nothing at all…

We currently have a 100% stock allocation, and feel completely comfortable with that. We are actually happy about the market going down. Why? Because it means that we can buy investments we like, at cheaper prices. Just last week while the market was going down, we added more money to our investments. We are praying 🙏 this continues for longer so we can continue to deploy funds. And we will every month, like clockwork.

We know that in both good times and bad, this too shall pass, nothing lasts forever. For example, last Wednesday alone, President Trump announced a 90 day pause on his reciprocal tariffs on most countries, which calmed the market down.

Conclusion

At a minimum this uncertainty provides us with an important lesson. When good times come it is important to save money, and invest consistently. We never know how long they will last… Meanwhile, when bad times come we just need to stay calm, use the money we saved to stay afloat, and continue to invest consistently. Remember that bad times too will eventually come to an end.

If you liked this post then you may also like:

Disclaimer: The information discussed in this blog is not financial advice, and is meant for educational purposes only. Please consult a personal financial expert before making any financial decisions.

Citations

Introduction

It felt like such a lifetime ago when everything was calm, the grass was green, and we all woke up like nothing was happening to enjoy our morning coffees or lattes. On April 2nd or as he likes to call it “Liberation Day”, The President of the United States of America announced that he would be applying a baseline 10% tariff on all imported goods in the USA. He would also be applying reciprocal tariffs on 60 countries, essentially starting a global trade war (who knew so much could happen in 2 weeks).

Following this, the global stock market felt nervous, as investors were worried that a global trade war would lead to a sharp increase in prices and affect consumers. According to the Canadian Chambers of Commerce, If a 25% tariff were to go into effect, that would cost a Canadian household on average $1,900 on an annual basis. A shock like this would affect consumers greatly, and consequently businesses, resulting in the stock market starting to go into a huge freefall.

For example, in just two days, the S&P 500 fell by almost 11%, which is its worst performance since the COVID pandemic.

Since we have been investing for almost 5 years now, it’s just another day for us. However, we realized that many of our readers are new investors and may be significantly stressed over the events going on right now. So, we wanted to give you some advice to help you feel better (even if only slightly), and provide some tips on how to survive this and future market downturns.

5 Tips on How to Survive a Stock Market Crash

  1. Reduce Expenses

With a potential recession and global trade war coming to Canada, now is a great time to advise you to try to cut expenses where you can. Tariffs are effectively a tax and as a result, businesses and consumers will pay more for the things we all buy. It would be a good idea to review your budget and try to find items that you can get rid of (or can live without), or find cheaper alternatives. During times of uncertainty, having more money in your pocket would definitely be helpful.

  1. Understanding Thy Self

I want you to take a deep breath and reflect on how you feel right now. Are you Stressed? Or Worried?. This is important to take note because how you feel is a great way to assess how much risk you can handle.

Many new investors just throw their money into whatever portfolio they like. They may invest based on research, or simply just based on emotions. This could be an effective strategy when the stock market is going up. In fact, most strategies work in a bull market. However, those same people tend to be the first ones to sell when a market downturn occurs, like the one we are going through now.

Always understand what you’re invested/investing in and make sure it’s appropriate for your risk tolerance, so, when bad times come, you’re less likely to freak out and sell. Speaking of selling…

  1. Don’t Sell

The number one rule you need to follow during a stock market crash is “DON’T PANIC SELL”.

Don’t get us wrong, there are times when you need to sell an investment. However, the decision to do so should be based on a sound rationale such as the company is now overvalued, or has moved away from its core thesis. It could also be that you need the cash, or have found a better alternative. However, many people sell during a down market due to fear of loss. They see losses accumulating in their accounts, and get out of the market to avoid any further pain.

It is important to remember that you had an investment strategy before this happened. This is just a bump in the road on the journey to your final destination. Selling as the market goes down only guarantees a loss. Based on market history holding on guarantees a eventual recuperation of those losses, and a gain long term. Our advice is to stick to your strategy, don’t succumb to the fear, and don’t sell.

  1. Keep Buying

While you freak out about the money you’ve lost already in the market your default emotional response is to want to sell. Surprisingly enough, our advice to you right now is the opposite… buy more stock. If you have cash, now may be a good time to deploy it. If you don’t, wait until your next paycheck, and continue your DCA strategy.

I know you probably think we’re crazy, but hear us out. The stock market historically does not go down as often as people think it does. For example, the S&P 500 normally enters a bear market (20% decline or more) once every three and a half years. That means that these declines do not happen often, so it’s a great time to capitalize, and buy when you can.

Think of a store or product you really like, but its super expensive. Now imagine that once every three and a half years, they had a sale where prices went down by 20%, or more. Wouldn’t you want to capitalize on that opportunity? Wouldn’t you buy more of the product than you normally would on any other day?

The same rationale goes for the stock market, try to buy more when the sale comes.

  1. What We Are Doing?


Absolutely nothing at all…

We currently have a 100% stock allocation, and feel completely comfortable with that. We are actually happy about the market going down. Why? Because it means that we can buy investments we like, at cheaper prices. Just last week while the market was going down, we added more money to our investments. We are praying 🙏 this continues for longer so we can continue to deploy funds. And we will every month, like clockwork.

We know that in both good times and bad, this too shall pass, nothing lasts forever. For example, last Wednesday alone, President Trump announced a 90 day pause on his reciprocal tariffs on most countries, which calmed the market down.

Conclusion

At a minimum this uncertainty provides us with an important lesson. When good times come it is important to save money, and invest consistently. We never know how long they will last… Meanwhile, when bad times come we just need to stay calm, use the money we saved to stay afloat, and continue to invest consistently. Remember that bad times too will eventually come to an end.

If you liked this post then you may also like:

Disclaimer: The information discussed in this blog is not financial advice, and is meant for educational purposes only. Please consult a personal financial expert before making any financial decisions.

Citations

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