3 Smart Moves Investors Can Make in the Stock Market Crash -- and 1 Big Mistake to Avoid (2025)

Matt Frankel, The Motley Fool

Tue, Apr 8, 2025, 6:11 AM 6 min read

It's been a turbulent time for the financial markets, to put it mildly. The S&P 500 (SNPINDEX: ^GSPC) fell by more than 10% over a two-day stretch and is officially in bear market territory, as of this writing. Most other major indexes are also down sharply from their recent highs.

Times like these can be frightening, especially if you're a relatively new investor. But it's important to realize that market corrections, bear markets, and even stock market crashes are a normal part of long-term investing and can be expected to happen occasionally.

A market correction, defined as a drop of 10% or more from previous highs, happens about once a year historically. Bear markets, which are typically defined as a 20% drop, have occurred every five years or so, and it isn't unheard of for the S&P 500 to fall significantly more than that. In the 2007-2009 Great Recession, for example, the S&P 500 fell by well over 50% before it finally bottomed out.

While market corrections and crashes are a normal part of investing, how you handle them can have a massive impact on your long-term results. With that in mind, here are three smart moves you can make during a stock market downturn like this, and one mistake that's incredibly important to avoid.

In no particular order, here are some things you might consider doing in the turbulent stock market environment:

One of my favorite things to say to myself, as well as to clients, when the market gets extremely turbulent (like it did the two days after the tariff announcement) is, "Today is a great day to do nothing." Unless I need to see the news for writing purposes, I'll often turn it off when the market is really volatile.

Even if I see a stock I want to buy trading for a relatively cheap price, I'll often wait and let the dust settle before doing anything. The way I think about it is either the market will quickly rebound and I'll miss out (but the rest of my portfolio will go back up), or things will fall even further and I'll get a better opportunity.

The tariff situation is a great example of this. The S&P 500 fell by about 5% the day after the announcement, but if you had waited a couple more days, you could have capitalized on another 7% downside.

2. Look for bargains

While it's perfectly fine to do nothing at all in a market downturn, it can also be a good idea to start looking for places to put money to work. That's especially true when the market has already fallen into bear market territory, like now.