If a Stock Market Crash Is Coming, History Says Investors Who Make This Simple Move Will Win
2026-09-06 08:28
•Trevor Jennewine •The Motley Fool
•••• • Axe Cap view
Why Buying the Dip Could Beat Timing a Crash
History shows that investors who buy during market dips often come out ahead, even when a crash seems likely.
South African investors watching global markets might feel uneasy with risks from rising oil prices, stubborn inflation, and potential US interest rate hikes ahead of midterm elections. These factors weigh on US tech shares and bond yields, creating jitters. But data going back decades tells a simpler story: markets tend to bounce back after corrections. The S&P 500 and Nasdaq, for example, often deliver 18-21% returns a year after dipping below correction levels. For us on the JSE, this implies a steady rand basket theme and counters with global exposure like Naspers and Prosus remain attractive. They’re not immune to global volatility, but panicking out now could mean missing out on rebounds. The risk? Prolonged inflation or a sharp rand sell-off could derail the recovery. Still, trying to time the exact bottom is a mug’s game. Buying into market weakness, with a focus on quality names and a hedge against rand risks, makes more sense. this is just our opinion and not financial advice
Buy into select rand-hedged stocks like Naspers and Prosus on market dips, watching USD/ZAR for signs of rand stress. Avoid overexposure to purely local plays until inflation eases. Trim if global headwinds worsen sharply.
- Naspers
- Prosus
- USD/ZAR
- Prolonged US inflation leading to higher rates
- A sharp rand depreciation hurting local consumption stocks
7/10
The article warns that the stock market faces vulnerability to a downturn due to elevated oil prices, potential interest rate hikes, high bond yields, and midterm election uncertainty. However, historical data shows that investors who buy during market corrections have consistently profited, with the S&P 500 and Nasdaq averaging 18% and 21% returns respectively in the year following their first close in correction territory. The key strategy is to avoid timing the market and instead buy index funds during downturns.
Our take is based on reporting first published by The Motley Fool.
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