CAC 40, S&P 500: How to survive the fall of stock market stocks?

The stock markets are still unscrewing, leading to their falls the ETF held by a large number of investors. In case of crash, is it better to sell, diversify or wait? Here are four reflexes to adopt to cross the storm.

Sweaty scholars. This Monday, April 7, European scholarships opened in bright red (-6.8% for CAC 40, -5.75% for the Dax) while the Tokyo Stock Exchange closed on a dive of almost 8%. A black Monday which accentuates the collapse already observed in the stock markets last week, following the massive increase in customs duties on a global scale announced by Donald Trump. Friday, April 5, the Dow Jones sold 7.13% over the week, the S&P 500 8.66% and the Nasdaq Composite almost 9%.

Also, if you are invested in stocks via ETF (or “trackers”) -these financial instruments which reply the performance of an asset or an index -, your different positions are undoubtedly dangerously down to your trading app or your securities account. In this slump, how to cope with the fall in courses and continue to sail serenely? Here are four tips for passing the stock market storm.

Do not sell at the bottom

The very first advice of professionals during dropouts is that of not panicking and, above all, not to end your positions when the markets are at the lowest. You would then act a value, which is only virtual as long as you do not sell your titles. Above all, you might miss the rise in courses, and thus abandon a significant part of your potential gains.

In the “big savings meeting”, Amélie Ziegelmeyer, director general management private at Laplace, recently recalled that “Over the past 10 years, the performance of the equity markets is on average 8% per year. But if you miss the 10 best grant days, you fall to 2.40%, and if you miss the 40 best, we fall to -6% annual performance ». Above all, it is necessary to keep in mind that performance in the financial markets requires being invested in long time.

With this prerequisite in mind, it is possible for you, without selling your already acquired ETF shares, to take advantage of the drop in markets to invest your capital in a new strategy more diverse in terms of geography, categories of ETF or sectors.

Diversification remains key

To limit the breakage, have the most diverse investment portfolio as possible will remain a strategy to favor. Good news, therefore, if you have bet on ETFs, because these financial instruments are by nature diversified. Investing in a whole index exposes you to less fluctuations than to select business actions inside this index: “A diversified portfolio on several titles fluctuates less than each of these titles”recalls the Autorité des Marchés Financiers (AMF).

To push this diversification further, and avoid according to the adage “To put all your eggs in the same basket”you can, for example, expose yourself to several major world indices. If you were mainly invested in American scholarships – like a large part of French investors -, reallowing part of your capital to European indices (such as the Stoxx Europe 600, for example) or emerging (Shanghai Composite, for example) can be an option.

Finally, for an even larger diversification, it is possible to opt for an ETF of type “MSCI World”, allowing to be exposed to more than a thousand large companies around the world: “The diversified ETFs, such as the FTSE World, offer a single world diverse fund that can help amortize volatility”, Confirms Céline Haddad, expert in personal finances at Plum.

Think about other ETF categories

There is not only for actions in life, and buying an ETF does not necessarily mean investing in corporate securities. In the ETF catalog eligible for your securities account, it is possible to consult the DIC, key information document, in which its “tracker” is its risk rating for each “tracker”. If the ETFs invested in shares generally have a note of 6 or 7 out of 7, it is also possible for you to go towards ETFs deemed less risky, in particular bond ETFs, noted between 3 and 4 out of 7.

“Besides ETF shares, there are indeed a multitude of bond or monetary ETF that investors can favor in periods of uncertainty leading more volatility to the equity markets. (…) The least risky ETFs are generally those which invest in high -quality bonds, such as state obligations or best rated business obligations (“Investment grade” rating) “)”recalls Ivana Davau, manager of digital distribution France, Belgium and Luxembourg at Blackrock. “We can for example watch European bond ETFs like the Vanguard EUR Corporate Bond Ucits ETF”specifies Céline Haddad.

In the current context, an ETF backed by gold can also be a withdrawal solution, with prospects for potential increase following the announcements of Donald Trump. The ETF Amundi Physical Gold for example is however a little more risky, with a note of 4 out of 7. Finally, if you want to remain invested in shares, opt for equity ETFs (“Equal Weight” in English) is a solution to consider to reduce volatility, in particular on large American clues, whose performance is currently correlated with a very limited number of technological values ​​(we think of “7 magnificent”: Nvidia, call, meta, etc.). By choosing an ETF in which each company has the same weight, “We gain less when the price of the index goes up, but above all, we lose less when it falls”explains Bertrand Haumeser, managing partner at Elea Capital.

Exhausting more resilient sectors or thematic

In the period of stock market collapse, certain economic sectors are also deemed more resilient. This is the case of so-called “defensive” sectors, that is to say, the most chance of which has the most chance of continuing despite the stock market marasm. We can watch for example the sectors that best withstanding Donald Trump’s announcements last week: that of energy distribution, basic consumption, or health. An index like the MSCI World Consumer Staples will for example focus on consumer companies on a globe level (Carrefour, Nestlé, Mondelez, Heineken, etc.)

Second solution: bet on the rise in sectors currently unaccomplayed on the stock market, and which are therefore, statistically, more likely to start upwards than already very valued sectors, such as high technology. According to Bloomberg data compiled by the ETF XTRACKER distributor (by DWS), the three sectors that have the least performed in 2024 are energy (+2.70%), health (+1.13%), and industrial materials (-5.50%).