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The prospect of a stock market crash can be a scary one. Often a crash can generate fear and panic.
In reality, though, there are two sides to every coin – and that is certainly true for a stock market crash.
For a small investor with the right approach, I think a crash can actually present an opportunity – potentially a lucrative one, the likes of which comes around only once every decade or two.
Psychology really matters here
There was a crash in 2020, throwing up some deep bargains. Before that, it had been over a decade since the 2008 crash as part of the financial crisis.
Given that these events do not happen often, many small investors are not prepared for them. They may never have lived through a crash before.
Even for an old hand in the markets, it can take nerves of steel!
Watching the value of shares you own (perhaps your whole portfolio) go down 10%, then 20%, and so on can be very unsettling.
But it is crucial to recognise your own psychology and stay disciplined in such moments.
In a stock market crash, the paper value of a portfolio can change dramatically and in short order. But an investor is under no obligation to sell.
If they still believe in the investment case for the companies they own and take a long-term approach to investing, they can ride the storm without making irrational choices to sell.
A crash changes the selling price of a company’s shares – but it does not necessarily change the worth of the underlying business.
Here’s how I’m getting ready for a crash
In fact, that throws up an opportunity to buy new shares for a portfolio, potentially at a bargain price.
Doing so can mean buying shares one already owns at a lower price than before. Or it can be using a sudden price fall to scoop up shares in a brilliant business at a cheaper price than previously possible.
Will this opportunity come along in 2026?
Like everyone else, I do not know. Nobody can say with certainty when the next stock market crash will happen.
But we do know there will be one, sooner or later.
Such windows of opportunity for deep bargain hunting can be short-lived. So I am getting ready now, by making a list of shares I would like to own if I could buy them at the right price.
Here’s one share on my list!
For example, in the past I have owned shares in specialist lab instrument maker Judges Scientific (LSE: JDG).
I do like the business though. Its clients are willing to pay for precision, giving Judges pricing power. Judges has some unique expertise and a world-class reputation.
Judges strikes me as a great business. I would be happy to invest again, if I could do so at what I think is an attractive price.
Judges shares have been getting cheaper lately. In fact the price has fallen 17% since the start of 2026.
A profit warning this week shook investor confidence. The company’s 2026 outlook pointed to multiple risks, including uncertainty about US demand amidst government spending cuts and the likely delay of an expected coring expedition.
Still, at 29 times earnings, the share does not yet look cheap to me.
