If a Stock Market Crash Is Coming, These 3 ETFs Could Be Smart Buys Right Now
Key Points
Trying to predict when the next market crash will happen is a waste of effort.
If you switch to cash, you'll likely do more long-term damage to your portfolio than good.
Here are three ETFs that can add layers of smart protection instead.
- 10 stocks we like better than iShares Trust - iShares Msci Usa Quality Factor ETF ›
Inflation is on the rise. Interest rates are too. Debt for many is soaring. The Iran war shows no end in sight. Many economic indicators point to problems ahead.
Given the signs, it's easy to think that the next big market crash might not be too far off. But when a crash might happen is impossible to predict, although some investors do try. They take the ill-advised action of moving everything you own to cash and hope that their prediction is right.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
The better option is to prepare your portfolio today to help cushion any potential downside risk without significantly altering your long-term asset allocation plans. Let's look at some exchange-traded funds (ETFs) that can help with that.
Image source: Getty Images.
The iShares MSCI USA Quality Factor ETF (NYSEMKT: QUAL) would be my first recommendation. Whenever there's market uncertainty and volatility, it always helps to own high-quality companies with strong balance sheets that can weather any economic downturn. This ETF does just that.
The iShares MSCI USA Minimum Volatility Factor ETF (NYSEMKT: USMV) offers another approach. Instead of looking at balance sheets, it looks at stock price behavior. Specifically, the fund uses an optimization process designed to produce a portfolio that minimizes overall volatility. As part of its analysis, it considers how individual stocks move together rather than focusing on isolated price swings. That gives it a leg up on funds that just hold a basket of low-volatility stocks.
If you want to go with a more traditional equity hedge, there's the Vanguard Intermediate-Term Treasury ETF (NASDAQ: VGIT). Treasuries haven't had a stellar track record recently, but they're starting to demonstrate once again the opposing correlation with equities they're long known for. If a market crash occurs, investors are likely to buy government bonds as a safe haven, which could make this ETF a smart buy.
Regardless of the ETF you choose, it's always better to choose protection over prediction.
Should you buy stock in iShares Trust - iShares Msci Usa Quality Factor ETF right now?
Before you buy stock in iShares Trust - iShares Msci Usa Quality Factor ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and iShares Trust - iShares Msci Usa Quality Factor ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $361,650!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,437,517!*
Now, it’s worth noting Stock Advisor’s total average return is 936% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of October 4, 2026.
David Dierking has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Recommended Articles
