So far, 2026 has been something of a white-knuckle ride in the stock market. Although the UK market has avoided a crash, it has had some dramatic seesaws.
Indeed, just yesterday (8 April) we saw some shares surge on the back of the latest developments in the Middle Eastern war.
But while that may offer some short-term relief to investors, I think it is also a stark reminder of how fragile investor sentiment currently is. Yesterday was a good day in the stock market – but there could be more painful days ahead.
I think now is the perfect time to get ready for a dramatic stock market crash, in fact.
The value of preparation over market timing
That does not mean I necessarily expect a crash soon.
Sure, I see lots of reasons why a dramatic crash could make sense. Oil prices have lately surged. That will probably push up inflation substantially.
Geopolitical tensions are high, shipping rates are all over the place and investors are nervous. None of those factors tend to be positive for the stock market overall.
But markets can and do defy negative circumstances. Conversely, sometimes they struggle even when the economy is strong and businesses are doing well.
That is why it can be a costly mistake to try and time the market.
We know it will crash sooner or later. I also reckon there are good reasons why that could happen soon – but there is no certainty it will. As John Maynard Keynes said, markets can remain irrational longer than you can stay solvent.
My solution?
Instead of trying to time the market, I am getting ready scoop up some potential bargains in the next crash – whenever that turns out to be.
Separating business quality from current share price
In practice, that means I am updating a watch list of companies that I would like to invest in if I could do so at an attractive price.
These are firms I think have great businesses. So, you may wonder, as a long-term investor, why do I not simply buy them now?
The answer is valuation.
Even a great company can make a poor investment if someone pays too much for it.
As stock market crashes can be short-lived, I want to be ready to act when the next one happens. That could happen at any moment, so I see now as the time to keep my list updated.
Here’s a share I have my eye on
One name on my list is Google owner Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL).
Its share price has surged 180% over the past five years. At 29 times earnings, it may not look as obviously overpriced as some tech firms.
Still, that price is too high for my tastes. Alphabet faces risks ranging from its massive investment in AI infrastructure not paying back to a weak economy eating into advertisers’ willingness to spend on YouTube ad slots.
Still, the underlying business remains strong.
Google, YouTube and other Alphabet businesses benefit from the company’s tech strength, massive user data and strong brand awareness.
The motive to switch to a different provider is often low. Barriers to switching can be high for Alphabet’s enormous installed base of regular users. That ought to help long-term profitability.
