3 Vanguard ETFs to Buy to Protect Your Portfolio From a Potential Stock Market Crash

Core Viewpoint - Investors are increasingly concerned about a potential bear market, prompting a shift towards value, dividend, and international stocks, despite the S&P 500 remaining flat in 2026 [2]. Group 1: Market Conditions - After three consecutive years of over 15% gains for the S&P 500, it is wise to consider portfolio protection against a market correction [1][15]. - Current expectations for GDP and earnings growth, along with stable inflation, do not indicate immediate risks for the markets, but preparation is advisable [3]. Group 2: Investment Strategies - The Vanguard Short-Term Treasury ETF (VGSH) offers a low-volatility option by focusing on short-term U.S. Treasury bonds, providing a 3.6% yield and minimizing default risk [5]. - The Vanguard Total Bond Market ETF (BND) invests across the entire U.S. investment-grade bond market, including Treasuries and corporate bonds, with a yield of 4.2% that compensates for added risk [8][9]. - The Vanguard U.S. Minimum Volatility ETF (VFMV) targets stocks with lower volatility, reallocating towards value and defensive equities, which can help mitigate downside risk [11]. Group 3: Sector Allocations - The VFMV ETF's top sector holdings include technology (26%), industrials (12%), consumer discretionary (11%), and financials (11%), with a focus on less volatile tech stocks [12][13]. Group 4: Overall Strategy - While these Vanguard ETFs may not guarantee protection in a bear market, they are designed to cushion against volatility and should be selected based on individual investment goals and risk tolerance [14].