Last week served up a timely reminder that ASX shares can turn lower quickly. The S&P/ASX 200 Index (ASX: XJO) began the week above the psychologically important 9,000-point mark, a level it had comfortably held for more than a month.

By the end of the week, however, the benchmark had fallen more than 3% to around 8,741 points.

That sharp move may have investors asking an uncomfortable question: are we watching the beginning of a broader stock market crash?

The truth is that nobody knows when the next crash will happen. What history does tell us is that severe market declines are an unavoidable part of investing.

Rather than attempting to predict the next sell-off, I prefer to prepare for one. That means stress-testing my portfolio and asking whether I could remain rational if ASX shares suffered a much steeper decline.

Could you survive a 30% downturn?

Market crashes can seem like distant possibilities when share prices are rising. But investors only need to look back to early 2020 for a reminder of how quickly conditions can change. During the COVID-19 panic, the ASX 200 plunged roughly 30% between January and March.

The next downturn could have an entirely different trigger. Its timing and severity are impossible to know.

So I ask myself a simple question: what would I do if my portfolio, with ASX shares fell 30% tomorrow? Would I panic and sell? Or would I be comfortable holding?

I also consider an even more extreme scenario. How would I react if my portfolio lost 50%?

These aren’t merely hypothetical exercises. Investors who haven’t considered their tolerance for substantial losses beforehand may be tempted to sell at precisely the wrong moment.

If a 30% or 50% decline would make you sell, it could be worth reassessing your portfolio’s risk profile now.

Is your portfolio too concentrated?

Diversification can provide an important buffer against company-specific and sector-wide shocks.

For example, owning several ASX shares doesn’t necessarily mean you’re well diversified if most of your money is concentrated in a few companies, sectors or economic themes. Investors should consider how much exposure they have to major names such as BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA), among others.

Holding businesses across different industries and, where appropriate, different asset classes can help reduce concentration risk.

Do you have an emergency cash buffer?

A market crash becomes much more painful when you need to sell shares to cover an unexpected expense.

Keeping an emergency fund outside your investment portfolio can provide breathing room. It means you’re less likely to be forced into selling quality ASX shares simply because you suddenly need cash.

Will you be ready to buy?

A crash isn’t necessarily just a threat. It can also create opportunities.

When fear dominates the market, excellent businesses can sometimes become available at substantially lower prices. But taking advantage of those opportunities requires capital.

If every dollar is already invested, investors may have little flexibility when attractive ASX shares go on sale.

Foolish takeaway

Nobody knows when the next crash will arrive or how severe it will be.

That’s why I don’t think predicting it is the most productive goal. Instead, I’m focusing on knowing my risk tolerance, maintaining sensible diversification, keeping an emergency cash buffer and having a plan for deploying capital.

The goal isn’t to predict the crash. It’s to make sure you’re ready when it comes.

The post Are ASX shares heading for a crash? Here’s how I’m preparing appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It was a busy week for Australia’s top brokers. This has led to a number of broker notes being released. 

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Corporate Travel Management Ltd (ASX: CTD)

According to a note out of Morgans, its analysts have resumed coverage on this corporate travel specialist’s shares with a buy rating and $3.06 price target. Morgans notes that after a long suspension, Corporate Travel Management has returned to trade after lodging its FY 2025 and FY 2026 audited accounts. This has seen material earnings restatements in response to years of overcharging clients and will result in refunds of $246m by September 2027. While this is clearly disappointing, Morgans remains positive. It believes earnings growth should resume from FY 2028 given new management’s strategy. This view is supported by the acceleration of new client wins in the first two months of FY 2027, which the broker sees as encouraging. Overall, the broker believes it is a turnaround story under new leadership with material upside potential if it executes. The Corporate Travel Management share price ended the week at $2.46.

Life360 Inc. (ASX: 360)

A note out of Citi reveals that its analysts have retained their buy rating and $28.80 price target on this location technology company’s shares. Citi was pleased to see Life360’s app downloads accelerate to 8% growth year-on-year in August from flat growth in July. This was driven largely by its US business, which delivered a record month. Looking ahead, the broker believes Life360 is well-placed to deliver a marked improvement in its EBITDA margin in the fourth quarter. This is expected to be supported by seasonal advertising and hardware revenue. The Life360 share price was fetching $19.73 at Friday’s close.

Metcash Ltd (ASX: MTS)

Analysts at Macquarie have upgraded this wholesale distributor’s shares to an outperform rating with a $3.20 price target. According to the note, the broker was pleased with Metcash’s trading update, highlighting that food sales were better than expected. And while its growth in the liquor segment was softer, it believes that the company is winning market share. Cost pressures are weighing on margins, but overall, Macquarie remains positive on the investment opportunity here and is recommending it to clients. The Metcash share price ended the week at $2.83.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

More reading

• Corporate Travel Management recently resumed trading – Here’s why it could be a buy
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• Life360 shares are 60% below broker targets. Here’s why
• Brokers rate these 5 ASX shares as a strong buy, and tip upsides of 28% to 62%

Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Corporate Travel Management, Life360, and Macquarie Group. The Motley Fool Australia has positions in and has recommended Corporate Travel Management and Life360. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There is something appealing about investments you do not have to keep second-guessing.

Buy them, add to them over time, and let the underlying companies do the work.

Of course, no investment should literally be ignored forever. But for investors with a very long time horizon, these five ASX exchange traded funds (ETFs) could be strong candidates to hold for decades.

iShares S&P 500 ETF (ASX: IVV)

The iShares S&P 500 ETF could be an obvious place to start.

It gives investors exposure to 500 of America’s largest listed companies.

The attraction here is not simply that the United States has performed well historically.

It is that the S&P 500 continually evolves. Successful companies grow into larger positions, new leaders enter the index, and businesses that decline in importance can eventually drop out.

That makes the iShares S&P 500 ETF a simple way to back the long-term strength of corporate America without trying to predict today’s winners decades into the future.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

The VanEck Morningstar Wide Moat ETF takes a more selective approach.

It invests in US companies that Morningstar believes possess sustainable competitive advantages and are trading at attractive valuations.

Those advantages could come from brands, intellectual property, cost advantages, network effects, or customers that are difficult to lose.

I think this philosophy makes plenty of sense for a long holding period.

A business that can defend its profits from competitors has a better chance of compounding earnings for many years.

Vanguard FTSE All-World ex-US Shares Index ETF (ASX: VEU)

The Vanguard FTSE All-World ex-US Shares Index ETF could be a good option for investors wanting to look beyond America.

It invests across developed and emerging markets outside the United States.

This provides exposure to companies in Europe, Japan, Asia, Canada, and other markets around the world.

Nobody knows which country will produce the strongest returns over the next 20 years.

VEU allows investors to participate in growth across a huge part of the global economy without needing to make that call.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

The Betashares Asia Technology Tigers ETF is a more targeted long-term idea.

It invests in major Asian technology companies across semiconductors, ecommerce, gaming, digital platforms, and other areas.

Asia is home to some of the world’s most important technology businesses and enormous consumer markets.

I think that combination could provide plenty of growth over the decades ahead as more spending, services, and economic activity move online.

Global X FANG+ ETF (ASX: FANG)

Finally, the Global X FANG+ ETF could suit investors who want concentrated exposure to some of the world’s dominant growth companies.

The fund invests in a small collection of major technology and consumer businesses involved in areas such as artificial intelligence, cloud computing, digital advertising, ecommerce, electric vehicles, and online entertainment.

It will inevitably have periods of significant volatility.

But over a very long period, I think owning companies that are helping shape how people work, communicate, shop, and use technology could prove rewarding.

The post 5 ASX ETFs to buy and hold forever appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Betashares Capital – Asia Technology Tigers Etf and VanEck Morningstar Wide Moat ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Vanguard International Equity Index Funds – Vanguard Ftse All-World ex-US ETF and iShares S&P 500 ETF. The Motley Fool Australia has recommended VanEck Morningstar Wide Moat ETF and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.