OPINION: Here are some tips to survive the 2025 stock market crash

An electronic display show financial information on the floor at the New York Stock Exchange in New York, Tuesday, April 8, 2025. (AP Photo/Seth Wenig)

The world’s stock markets are reeling, screens are turning red, and the most nervous investors are already talking of a “Black Monday” or “Black Tuesday.”

The cause: a unilateral decision by U.S. President Donald Trump to impose tariffs ranging from 10 per cent to 49 per cent on exports from more than 180 countries.

It’s a protectionist escalation that is raising fears of a global slowdown, or even a recession.

In Hong Kong, the Hang Seng index plunged more than 13 per cent on Monday.

In New York, the S&P 500 officially entered correction territory.

Is this a stock market crash? Yes.

The term already applies to some markets.

Is it the end of the world for investors? No.

As long as you keep your cool and learn from the lessons of the past.

Déjà vu

Financial history is punctuated by spectacular crashes:

• 1929: The famous Black Thursday marked the start of the Great Depression.
• 1987: The Dow Jones lost 22.6 per cent in a single day.
• 2000: The burst of the tech bubble cut the Nasdaq index in half.
• 2008: The collapse of Lehman Brothers plunged the world into a major financial crisis.
• 2020: The COVID-19 pandemic sent markets plummeting by more than 30 per cent in one month... before a rapid recovery.

Each time, the scenario seems apocalyptic.

Yet every time, the markets eventually recover.

History shows that the stock market rewards patience more than panic.

How long does a recovery last?

According to Morningstar’s Quentin Fottrel, the market’s ability to regain lost ground depends on the severity of the economic context.

The figures show the S&P 500 SPX falling 18 per cent in 2022, gaining 26 per cent in 2023, then rising another 25 per cent in 2024.

Historical data shows that it sometimes takes a month (like in 2023), three months (in 2015 and 2016), six months (in 2009, 2010, 2011, 2018, 2020) or, more generally, a year to “correct” by at least 10 per cent."

In cases of crashes, it can take longer.

Even in the worst cases, such as 2008, those who held on saw their portfolios return to - and exceed - their initial levels.

What distinguishes winning investors is not their ability to predict the fall, but their determination to weather the storm.

The exit trap

Exiting the market during a crash can provide a temporary sense of relief, but missing the recovery is far more costly.

Here’s a striking statistic: if you missed the 10 best days in the stock market over the past 20 years, your return would have been cut by more than half.

Guess when those days often occurred? Right after the worst.

In 2009, for example, the U.S. market jumped 11 per cent in a single day.

Those who had shunned the markets out of fear missed the boost.

Tariffs like in 1930?

Drawing parallels with the past is tempting.

In 1930, President Herbert Hoover signed the Smoot-Hawley Tariff Act, imposing tariffs on over 20,000 products.

The intention was to protect the American economy, but the result was the opposite: a global trade war, a collapse in international trade and a deepening economic crisis.

Today, the global economy is much more interconnected, but also increasingly resilient.

Central banks are quicker to intervene, and governments are better equipped to stimulate the economy.

Will the tariffs of 2025 trigger a global recession? Perhaps.

But we now know that a coordinated response from the authorities can make all the difference, which suggests that rebounds are likely to be quicker.

5 tips for surviving - and profiting

1. Don’t touch your long-term investments.

Your RRSP and TFSA investments are for retirement, not next week. Selling them now means crystallizing a temporary loss into a permanent one.

2. Rebalance strategically.

If your funds or stocks have fallen and your target allocation is unbalanced, consider reinvesting in the declining categories.

It’s counter-intuitive, but historically rewarding.

Dividend funds and ETFs are usually less impacted, and holding a good proportion of them is recommended.

3. Continue your automatic contributions.

Investing regularly (even during a crash) allows you to buy more units at low prices. It’s like a Black Friday sale.

4. Don’t look at your account statements and financial news too often.

Headlines are meant to captivate, not guide your decisions.

Too much exposure to financial news increases anxiety... and bad decisions.

5. Talk to your financial planner.

A good professional isn’t just worried about building a portfolio, they’re also supposed to keep you from making foolish decisions when emotions may get the better of you.

What if you had capital to invest?

Great fortunes have often been built during crises.

Warren Buffett likes to say, “Be fearful when others are greedy, and greedy when others are fearful.”

If you have cash, this could be a good time to buy quality stocks at a discount.

But do it methodically.

Avoid going “all-in,” and opt for a progressive investment (for example, in five or six monthly instalments).

For the more daring, avoid borrowing to invest.

In conclusion

The stock market crash of 2025 is an ordeal for investors.

But it’s also an opportunity to apply proven investment principles.

History teaches us that markets correct, then rebound.

The important thing is not to let yourself be governed by fear.

Emotions are contagious.

Ambient pessimism can make you want to run away.

But if you have a solid plan, clear objectives, and the discipline to stick to them, you’ll not only be able to survive market corrections and even a crash, but also emerge stronger.

Original version on Noovo Info. Translated from French for CTV News Montreal.