Last year was strong in the stock market on both sides of the pond, with both the FTSE 100 and the S&P 500 setting new all-time highs.
2026 has begun strongly too, with both indices having again set new all-time highs since the start of the year.
So it might seem like an odd time to be fretting about the prospect of a stock market crash. But the reality is that the market can crash at any time, so it pays to be prepared.
Market timing can be tempting, but is very difficult
Will the stock market crash? All we can say with certainty is that it will, sooner or later – but nobody knows for sure when that will be.
It is impossible to time the market. However, less than a week into 2026 and we have already seen the heightened geopolitical risk of recent years rear its head again on the world stage. Meanwhile, the British economy generally and large parts of the US economy look fairly sluggish to me.
Add into that the strong gains seen in the stock market last year and there is the potential for a mismatch between the current market values of some companies and what their business prospects suggest they ought to be worth.
So while I am never a believer in trying to time the market, I do see conditions at the moment that could help trigger volatility in the market at some point, and perhaps even a full-on crash.
Taking the long-term view
In a sense though, that does not bother me as much as it may concern some short-term traders. I take a long-term approach to investing.
Part of such a long-term approach involves taking the rough with the smooth. If an investment timeframe is long enough, there is bound to be some turbulence along the way.
That need not matter, in my view, if an investor has patience and continues to believe in the long-term value of a specific company relative to its share price. In fact, a stock market crash could actually work to an investor’s advantage if it enables them to buy a share they want at what they see as an attractive price.
Getting ready for a crash
As an example, I like the Cranswick (LSE: CWK) business model. Meat products might not sound glamorous, but Cranswick proves it can be a lucrative business area.
The FTSE 250 company has grown its dividend per share annually for decades. Its deep customer relationships, extensive network of production sites and industry know-how all help give it a competitive edge.
And the Cranswick share price reflects those strengths, having moved up 36% over the past five years.
The share sells for 18 times earnings. But that price, I am not willing to invest.
The company faces risks, from supply chain inflation to the risk of reputational damage following a critical report on conditions at one of its pig farms last year. That ethical concern alone may put some investors off.
At the right price though, Cranswick is the sort of share I would happily own. For now, it is too expensive for my tastes, but it is on my watchlist, in case a future stock market crash makes the valuation more attractive.
