3 Reasons a Stock Market Crash Can Hurt You Even if You Don’t Own Stocks
Written by
Laura Bogart
Edited by
Kristen Mae
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If you’ve even casually scrolled through social media these days, you’ve probably seen a litany of talking heads and commentators warning about a potential stock market crash. Terms like “recession” are flying around fast and loose, along with “crash,” “dip,” and “oh no.” It all sounds pretty bad — for people who have a lot of money tied up in the stock market.
But that’s not you.
You don’t like to take chances with your money — or maybe you just don’t have much to spare in the first place. Whether it’s in a savings account, tucked under a mattress, or already spoken for by bills and rent, one thing’s for sure: it’s not in the stock market. So, not to sound flippant — but why should you care?
Turns out, there are a few very good reasons why you should. Even if you’re never going to be seen running around Wall Street, what happens there can still impact your everyday life.
Vibecession Is Real
For the uninitiated, a “vibecession” is when the public’s feelings about the economy sour, even if traditional indicators like employment and GDP remain strong. And when those indicators, such as the stock market, start to wobble, that unease only deepens.
This sense of all-around economic unease — call it the trickle-down blues, if you will — can lead to shifting behaviors that trigger a self-fulfilling prophecy. People tighten their belts, businesses get more cautious, and suddenly, the economy slows down, not just in vibes, but in reality.
Reporting from CNBC shows that stock market concerns, worsened by inflation and trade tensions due to tariff whiplash, are weighing heavily on Americans. A joint survey by CNBC and SurveyMonkey found that 48% of Americans are more stressed about money than they were last year.
Eric Johnson, CEO of SurveyMonkey, broke down why vibecessions are bad for all Americans — including you:
“The psychological shift is clear: stability isn’t just about income but whether that income is enough to withstand unexpected costs, plan for the future, and maintain a basic standard of living. For many earners, regardless of their tax bracket, the answer is no.”
Increased Risk of Layoffs
Even if you think you’re immune to the bad vibes caused by a market crash, your employer might not be. Kevin Thompson, CFP, RICP, EA, president and CEO of 9i Capital Group, LLC, says that market volatility can have real consequences for job stability.
“While Trump referred to it as ‘a little pain,’ for many in his circle that pain amounts to nothing more than a paper loss. But for corporations, it means declining demand, which often leads to layoffs,” he said.
Market uncertainty can compel both consumers and companies to pull back on spending. That cautiousness can snowball into a recession, and with it, higher unemployment.
“What some call ‘a little pain’ can quickly become the difference between paying your mortgage or not — real-world consequences that go well beyond portfolio fluctuations,” Thompson added.
Opportunities Abound
Just because you’re not in the market now doesn’t mean you can’t take advantage of the moment. Believe it or not, despite the doom and gloom, downturns can be a great time to start investing.
Jason Brown, founder of The Brown Report, says now is a great time to consider buying into high-quality companies at a low price.
“Even investors who’ve never invested before should be paying attention. You don’t want to look back a year from now and say, ‘I wish I could have bought Apple stock or Amazon at 30% off,'” he said.
Downturns are often followed by recoveries, and historically, long-term investors who buy during dips are well-positioned for gains when the market rebounds.
Bottom Line
Even if you don’t have any money in the stock market, that doesn’t mean you’re immune from its ripple effects. A crash can sap consumer confidence, contribute to layoffs, and increase financial stress across the board. But it can also open the door to opportunity. If you’re financially stable, now could be a great time to explore investing — carefully and strategically — while some of the companies you’ve had your eye on are priced at a discount.
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