Stock Market Crash 2025

There is a lot of talk about a market crash, a recession, a doom period.

There is a lot of negativity in the media.

There is a lot of fear.

I feel like I need to address this, and provide some insights on steps you can take.

Zoom out

The S&P 500 is still up 108% over the last 5 years, not including dividends:

So, the stock market is doing just fine. Let’s think in years, not 2 week periods.

I’m panicking, what do I do?

If you are panicking, chances are you fall into one of these categories:

1. You don’t have a good emergency fund.
2. You don’t have a plan.
3. You don’t truly know what you are investing in.
4. You aren’t properly diversified between stocks and bonds.

It’s okay if you are, but let’s start correcting it now so you can stand on solid ground for the future.

Emergency

Before investing, you should have at least a 3–6 month emergency fund.

Don’t invest (aside from the 401k match amount) until you reach 3 – 6 months. 

If you are in an unstable industry or position, a business owner, or have unreliable assets (e.g., an old car), do 6 months.

Establish a plan

You shouldn’t invest if you don’t have a plan. To establish a plan, you need to know:

1. Your allocation between stocks and bonds
2. Your allocation between U.S. stocks and international stocks

For the first question, I highly recommend taking Vanguard’s questionnaire which will help you determine an allocation based on your answers. Take it.

For the 2nd, people feel differently. Some say that holding international stocks is like adding insurance, while others prefer 100% U.S. exposure due to American exceptionalism or the global reach of U.S. companies. Decide for yourself.

Then, you need to figure out:

1. Account
2. Investments

For accounts, prioritize tax-advantaged options first, such as a Roth IRA and 401(k).

If you have a 401(k) or 403(b), start there. Once you reach the contribution limits, use a brokerage account.

For investments, the best approach is to buy the entire market rather than individual stocks.

Here are some ETFs that represent the U.S. market:

• $VTI – Vanguard Total U.S. Stock Market ETF (100% U.S.)

• $FSKAX – Fidelity Total U.S. Stock Market ETF (100% U.S.)

• $SWTSX – Schwab Total U.S. Stock Market (100% U.S.)

These funds hold 2,000+ companies across small, medium, and large businesses.

For international:

• $VXUS – Vanguard Total International Stock Index Fund ETF (100% International)

For bonds:

• $BND – Vanguard Total Bond Market Index Fund ETF (100% bonds)

P.S. For a 401(k)/403(b), you won’t find exact tickers (i.e VTI), but you will find index funds tracking the total markets. Use them.

If you panic about your investments, it often means you don’t know exactly what you’re invested in, or don’t really understand why you bought it in the first place (i.e. some social media guru told you so)

Research your holdings and re-balance your positions if needed.

Stick to a plan

After you’ve figured out your plan, investments, and accounts to invest in, you need to do 2 things:

1. Set up automatic investing.

 If you use a 401(k), that’s easy. It’s also pretty easy to do it in a brokerage account, as most providers offer automatic investing.

2. Delete financial news and your app (if needed)

 You’ve established a plan that works for you, investments you understand, and an allocation that you need. There is literally no point in paying attention to the news or even having your investment app (after you’ve automated it).

That’s it. Enjoy life and tune out the noise. It works.