If the FTSE 100 crashes again here are 3 steps to help protect your portfolio

first_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. James J. McCombie | Monday, 25th May, 2020 I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. If the FTSE 100 crashes again here are 3 steps to help protect your portfolio James J. McCombie has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Enter Your Email Addresscenter_img “This Stock Could Be Like Buying Amazon in 1997” Image source: Getty Images The FTSE 100 has rebounded following its crash. Yet, investors still fret about the possibility of further market declines. That is not surprising. A recession is looming, and it is likely to be severe. Lockdowns are easing, but the possibility of a new wave of infections could shut economies down again.It would be foolish to say categorically that equity markets are out of the woods. So what can investors do to protect their portfolios should the FTSE 100, and stock markets in general, fall again?5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Other assets are availableIf an investor is concerned about the FTSE 100 falling again, moving some of their existing wealth into bond, real estate, and infrastructure funds might be a wise move. Diversification at the asset class level tends to smooth out the changes in overall portfolio value during times of market stress.An investor in the UK stock market could buy into an international equity fund. Doing this would maintain their exposure to equities, but spread the risk across a few borders.Instead of investing immediately, cash contributions to a portfolio could be left to build up. If the markets do fall again, there will be ample dry powder ready to snap up even cheaper stocks. However, cash won’t earn much in the way of returns if the markets do not fall.Time in the marketIf markets are expected to be volatile over the short term, then those with brief investment horizons will likely suffer. An investor who needs to cash in when markets have fallen or have not had time to recover will probably lose money.Stock market investing requires a long time horizon. An investor needs to have sufficient time to allow recovery from market crashes and the flexibility to delay cashing out if the need arises. Regular investing for the long term has been shown to beat trying to buy dips and time the market in the long term.Spread your betsSome sectors fared better than others in the last FTSE 100 crash. Energy and airline shares experienced dramatic losses. Utilities and healthcare stocks fared relatively well. The 2020 profits of energy, consumer discretionary, industrial and financial companies are expected to fall more than the average. On the other hand, the forecast for utility, technology, healthcare and consumer staples company profits is better than average.I am not going to suggest that everyone should move into healthcare stocks. However, I would urge investors to spread their bets across the industries and sectors on offer.Within the sectors, the shares of individual companies had very different fortunes. It is not enough to pick a company from industry and call it quits. The aim should be to pick the best company but avoid putting too much money in any one company no matter how good it looks. Bear in mind that best might mean having the strongest balance sheet at the moment. Putting it all togetherStock market investing involves trading risks for rewards. If an investor is worried about the FTSE 100 crashing again, they need to ask themselves how much of their portfolio they want to risk in the markets and be committed to long-term investing. Investments should be diversified across multiple industries and companies. In the long run, this should help protect a portfolio. Simply click below to discover how you can take advantage of this. Our 6 ‘Best Buys Now’ Shares See all posts by James J. McCombielast_img read more

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