Fall Market Crash Risk: 6 Defensive Moves for Boomers & Gen X Investors
A 57% market wipeout nearly triggered a second Great Depression, and veteran investors who lived through 1987 and 2008 recognize the warning signs gathering right now. Boomers and Gen X have too much at stake to ignore what overbought markets,…
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The “buy the dip” financial news teleprompter readers and the 30-year-old portfolio managers who have never seen a market crash are always insisting that stocks are going to the moon. Market veterans and “Hey Boomer” professionals know this show. In 1987, the Dow Jones industrials plunged by a stunning 22% in a single day. Today, a comparable drop in the venerable index would be 11,439 points. With 10-year bond yields at their highest level in over three years, 30-year bond yields at their highest since 2007, inflation relentlessly rising, profligate government spending, and a stock market far too overbought, these issues and others could lead to serious trouble.
From 2007 to 2009, during the height of the mortgage and real estate collapse, which brought us dangerously close to another depression, the market dropped a massive 57%. When the S&P 500 finally bottomed at an ominous intraday low of 666 on March 9, 2009, we set the floor for the longest bull market in history. That ended in January 2022 but picked right back up in June of that year. Except for the recent 10% decline that began when the war with Iran started, we have been in a huge bull market for almost four years. It’s been led by technology stocks and artificial intelligence hype.
So, where do we stand now? We may be on the precipice of a much more significant decline than we have seen since earlier this year, even as all major indices trade near all-time highs. One positive is that consumers and businesses are generally in reasonably good financial shape. Stock portfolios and home prices have increased dramatically over the last few years, and the economy isn’t teetering on the brink as it was globally in 2008, when Bear Stearns and Lehman Brothers collapsed. To avoid a similar fate, Bank of America bought Merrill Lynch. But that all could change, and change fast.
Between issues with private credit, a potential AI bubble, concerns over data centers, and an overbought stock market being forced higher by a handful of stocks, it makes sense to take some precautions now. Boomers and older Gen X are at a juncture in their investing lives where a major market crash could destroy the future they worked so hard for. Here are six steps for worried investors to take now.
Start Building a Cash Stash Now
One positive is that consumers and businesses are generally in reasonably good financial shape. Stock portfolios and home prices have increased dramatically over the last few years, and the economic system isn’t teetering on the abyss as it was globally in 2008. Matching current losses against gains, even if they are short-term, makes sense for building cash. The proverbial dry powder may come in handy down the road. High-yield money market savings pay as much as 4.50% and are insured up to $250,000. Here are the HYSAs paying the most from Bankrate.com
Top High-Yield Savings Accounts (September 2026)
- GO2bank 4.50% APY. The top rate only applies to balances up to $5,000.
- St. Mary’s Credit Union 4.50% APY. Requires credit union membership; the top rate applies to balances up to $50,000.
- Elevault 4.34% APY. Outstanding high yield with no minimum deposit or strict hoops to jump through.
- Abound Credit Union: 4.25% APY. Requires credit union membership; top rate is capped on balances up to $5,000
Close Out Any Margin Positions Immediately
Margin is the money borrowed from a broker to purchase an investment. When times are good, using margin loans to buy more stock is a bad plan for individual investors, especially when those margin positions are high-volatility momentum stocks. A market collapse could wipe out a highly leveraged margin account. Close out all margin positions before it’s too late.
Gold and Silver Still Make Sense
Gold is the most popular precious metal investment and has been on a strong upward trend over the last few years. As we have recommended for years at 24/7 Wall St., a gold position helps mitigate the downside, and it always makes sense to keep 3%-5% in stock portfolios. One outstanding way to own physical gold is through the SPDR Gold Shares ETF (NYSE:GLD), which is one of the best pure plays on Gold for investors. The trust that sponsors the fund holds physical gold bullion and some cash. Each share represents one-tenth of an ounce of gold. However, the fund does not pay a dividend.
Make Sure Investments Are Reinvested in More Shares
Dividend reinvestment is a great way for investors to grow their wealth steadily. Ensure that all dividend-paying stocks, mutual funds, and ETFs in personal and retirement accounts are set to reinvest all capital gains and dividends, if possible. This allows you to buy more shares when prices fall. The third quarter is almost over, and many stocks and funds pay dividends on a calendar quarterly basis. Be sure to check your accounts today.
Real Estate Can Help
Buying and owning real estate is a strategic investment that can be both satisfying and lucrative. Consider real estate instead of the stock market if you have the good fortune to come into a windfall, like an inheritance or something similar. While mortgage rates have increased over the past two years, the 30-year fixed rate reached 7.25% at one point and is back at 7% now for a 30-year FHA mortgage. While still reasonable historically, that’s the highest since the late 1980s and early 1990s. Owning a cash-generating, passive-income rental property always makes sense if located in the right area.
U.S. Treasury Bonds Are Starting to Look Very Good
Treasury bonds include a range of debt securities issued and backed by the U.S. government. Sell high-volatility stocks and look at the short end of the Treasury market. Like all Treasury debt, the full faith and credit of the United States guarantees the two-year note, which yields a solid 4.55%. One-year certificates of deposit yield as high as 4.05% to 4.75%, depending on the deposit amount.
One fund we highly recommend at 24/7 Wall St. is the SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:BIL), which currently yields a whopping 3.76%. The fund invests substantially all, but at least 80%, of its total assets in the securities comprising the index and in securities that the adviser determines to have economic characteristics substantially identical to the financial characteristics of the securities comprising the index. The index measures the performance of U.S. Treasury public obligations with a remaining maturity of one month or more but less than three months.
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Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad, diverse career, including a stint as creative services director at an NBC affiliate in Austin, Texas, gives him unique insight into the financial industry.
Lee Jackson's journey in the financial industry spans more than 30 years, including nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career spanned pivotal sell-side Wall Street events, from the dot-com rise and bubble to the Long-Term Capital Management debacle, 9/11, and the Great Recession of 2008. This reflects his resilience and adaptability amid market volatility.
Lee Jackson’s practical financial industry experience, gained through a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing across various platforms. This unique combination allows him to shed light on the intricacies of Wall Street in a way only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.
Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.
