What Survives a Crash? Lessons from 20 Years of Market Drawdowns

When markets crash, fear rises and portfolios suffer — but not all assets fall equally. Over the past two decades, investors have weathered a series of dramatic drawdowns, from the Dot-Com Bust and the Global Financial Crisis to the COVID shock and today's tariff-driven volatility. Each event has reshaped how markets behave and which sectors emerge strongest. In this post, we break down how the NASDAQ-100 and S&P 500 responded during five of the biggest crashes, and more importantly, what types of stocks outperformed when everything else sank. The goal? To help you build a shock-proof portfolio that’s resilient in the face of future uncertainty.

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The Shock-Proof Portfolio: I... Apr 6 · The Investor’s Edge: Spr... 11:10   ​

Key Observations

• NASDAQ-100 is more volatile but bounces back faster in tech-led recoveries.
• S&P 500 sees more stability due to broader sector exposure.
• Defensive sectors (staples, utilities, healthcare) anchor the S&P.
• Mega-cap profitable tech stocks are the NASDAQ-100's safety net.

Lessons from Past Drawdowns for Today’s Tariff-Induced Volatility

While previous drawdowns weren’t driven by tariffs, they offer valuable strategies for weathering today’s trade-related market stress:

1. 📦 Favor Domestic-Focused Companies
   • Companies with strong U.S. revenue bases and minimal global supply chain exposure tend to hold up better.
   • Examples: Utilities, regional banks, domestic REITs.
2. 💼 Lean Into Defensive Sectors
   • Consumer staples, healthcare, and utilities provide stability amid uncertainty and rising consumer costs.
   • ETFs: XLP, XLV, XLU.
3. ⚙️ Focus on Margin-Protecting Stocks
   • Prioritize firms with pricing power and low import reliance.
   • Examples: Costco, Apple, Eli Lilly.
4. 🛢️ Watch for Commodities & Inflation Beneficiaries
   • Energy and raw materials often outperform when tariffs raise input costs.
   • ETFs: XLE, DBA, GUNR.
5. 📉 Avoid High-Beta, Export-Dependent Names
   • Companies with high international exposure and low margins tend to suffer.

By blending exposure to resilient sectors and inflation-aware strategies, investors can position for both defense and selective growth during a tariff-driven downturn.

No one can predict the next market downturn, but history offers a reliable compass. Across all five major crashes, certain patterns repeat: high-quality companies with pricing power, strong balance sheets, and domestic focus tend to weather the storm. Whether it’s inflation, tariffs, or another global event that sparks volatility, the key is preparation—not prediction. By understanding past market behavior and aligning your investments with resilient sectors, you can stay focused, stay invested, and stay shock-proof.