The stock market is going to crash, it is inevitable. In this video we're going to debunk some stock market myths and look at the best ways to prepare for a stock market crash.

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How to recognise a looming stock market crash
Don't worry about timing the market
So if you're worried about the market being at an all time high (which it definitely might be), remember that even if you only buy at the all time highs right before the crashes, you'll still be substantially better off than if you left your money on the sidelines in a standard savings account, as long as you don't sell! But the best thing to do by far, is to consistently add to your investments over time, regardless of the current price, as this will even perform better than the world's best market timer! The simplest way to do this will be through using an automated investing tool.

Evaluate your current risk level
Now that you know that timing the market over the long run isn't actually a big deal, the next thing you should do to prepare yourself for a potential stock market crash, is to evaluate your current risk level. What I mean by this is, that you should only ever invest what you can afford to lose. As with any investment there is always the possibility it goes to 0. If you're investing in a broad market ETF, this chance is in all likelihood close to 0, and if we ever see the S&P 500 go to zero, well, we've got some really big problems, way bigger than our own personal stock portfolio.

Have an emergency fund
Which brings us to our next point on how to prepare for a market crash, and this is to always have an emergency fund set aside.

Now for those who don’t know an emergency fund is really just the money you set aside to only be used in case of you guessed it, an emergency, where you have no other place to turn. And ideally the size of this emergency fund should be equivalent to three to six months worth of your living expenses and kept easily accessible for obviously, emergencies.

Make sure you are diversified

In terms of being well prepared for a market crash, one of the most important things you can do is look at your portfolio and see if you are well diversified. Sometimes a market crash might actually only effect a certain area of the market, or have a larger effect in a particular industry or sector. This effect is only magnified if you're invested in individual companies!

To combat this, I would ensure that your investment portfolio is well diversified across both industries and countries. This could be as simple as using a single globally diversified ETF like [DHHF or VDHG](https://www.walletlab.com.au/vdhgvs..., or a combination of ETFs to achieve a similar result.

What to do if the stock market crashes

Now imagine we've done everything on this list and we're really prepared for a stock market crash and then finally we find ourselves right in the middle of one, like the most recent COVID stock market crash. What should we do now?

The best thing to do during a stock market crash is to stay the course and continue on your automated investing schedule and remember the law of large numbers, where over the long run you, like the casino, will always come out on top.

All opinions expressed in the video and this description are for entertainment only. You should consult a licensed professional before buying any securities, stocks, cryptocurrency or digital assets. Everything in this YouTube channel is for entertainment only.