My stock market crash plan

first_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. christopherruane owns shares of ExxonMobil and Unilever. The Motley Fool UK has recommended Howden Joinery Group and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. See all posts by Christopher Ruane Image source: Getty Images My stock market crash plan Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Enter Your Email Address Click here to get access to our presentation, and learn how to get the name of this ‘double agent’!center_img Don’t miss our special stock presentation.It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about.They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market.That’s why they’re referring to it as the FTSE’s ‘double agent’.Because they believe it’s working both with the market… And against it.To find out why we think you should add it to your portfolio today… There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Simply click below to discover how you can take advantage of this. Christopher Ruane | Thursday, 13th May, 2021 Our 6 ‘Best Buys Now’ Shares Markets have been frenetic this week. Many investors feel increasingly jittery about share price movements. Nobody knows how the stock market will perform in future. But I do have a plan for how to react to a stock market crash, whenever it might happen.Here are the key elements of my crash plan.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Be preparedIf a stock market crash comes, I may want to invest more money. But the window for action can be short. In March last year, for example, many shares crashed but started to recover within days. I was eyeing Howden Joinery, but within a few days of tumbling it was moving rapidly upwards again.So I find it helpful to have a watch list of stocks I find attractive. That way, if the stock market does take a dive, I can immediately know where to focus my attention.For example, Unilever is a company on my watchlist. If it fell as part of bigger rout, I would consider adding more to my portfolio. There is a risk an economic downturn could force consumers to trade down from premium brands, cutting Unilever’s profits. But in the long term, I see strong potential in its diversified portfolio and exposure to developing markets.Stay calmEven a wobble in share prices can be stomach churning for many investors. A stock market crash can cause panic to set in. Panic makes for poor decisions.When the markets are tumultuous, keeping a calm head enables me to react rationally and logically. For example, last year as Exxon plummeted, I thought about cutting my position. With the oil price down, I watched as the shares lost half their value in just a couple of months. But I considered my investment thesis about Exxon and decided that it still stacked up. I stayed calm, and didn’t sell.There are still risks: oil prices could fall again, for example. But staying calm helps me to focus on my investment analysis, and assess such risks.Focus on qualityStock market crashes are inevitable from time to time, just like stock market bubbles. I don’t spend lots of effort trying to time the market. Instead, I try to focus on identifying companies whose ability to generate cash is likely to survive a tumble in its share price.For example, Safestore has a strong brand and a simple business model. It could benefit from rising housing costs if people moving to smaller homes store belongings elsewhere. That said, even with  these characteristics, the share price may be buffeted by a stock market crash. I’d also weigh risks, such as growing competition exerting downward pressure on profit margins.Whatever the broader stock market was doing, I’d consider buying a company like Safestore. If anything, a crash pushing its price down would only makes it more attractive to me.Staying diversifiedA key part of my risk management approach is to limit my exposure to any one share or sector.Sometimes that can seem frustrating. I miss out on additional returns from a share or sector that is hot. But a stock market crash reminds me exactly why I choose to diversify.Holding a range of companies across different industries, I pay less attention to wild swings in any one share price. That helps me sleep more easily.last_img read more