r/investing debates crash prep: what a 57% drop really demands
As seen on the 24/7 Wall St. homepage on October 22, 2026.
Invest in a world etf, keep dcaing and chill
161 comments on a crash-prep thread keep circling the same risk: job loss forcing a sale at the bottom of a 57% drawdown. The cash cushion debate ranges from zero to two years of expenses.
Continue ReadingShow less
A thread posted by immigrantgirl on r/investing asks how your portfolio would hold up if a repeat of the 2007 financial crisis hit tomorrow, anchored by a 57% drawdown in the S&P 500 and a five-and-a-half-year recovery.
The thread's most-upvoted reply, from Helpful-Staff9562, lands on steady optimism: invest in a world ETF, keep dollar-cost averaging, and stay calm. One commenter holds zero cash buffer and plans to keep buying as long as they stay employed, targeting a FIRE milestone by the time markets recover.
The more anxious strand of the conversation centers on forced selling, where a job disappears in a prolonged drawdown and an investor has to liquidate near the bottom. One commenter advocates keeping 10% in cash to avoid becoming a forced seller, calling those dollars the highest-performing in a portfolio during a downturn.
The cash cushion debate shows no consensus, with responses ranging from holding nothing extra to building two full years of living expenses in reserve alongside alternative income sources. The original post warns that a future crisis takes even longer than five and a half years to recover, shifting the math depending on how close someone is to needing the money.