Market Overview - The markets have become increasingly nervous in 2026, transitioning from a rotation out of tech stocks to a broader sell-off of sectors potentially disrupted by artificial intelligence (AI) [1] Investment Strategies - The S&P 500 and Nasdaq-100 have not yet seen significant pullbacks, but there is a risk of larger declines if investor fear escalates [2] - In a potential bear market, investors may want to consider sectors that could perform well during stock corrections [2] Recommended ETFs - **Vanguard Extended Duration Treasury ETF (EDV)**: This ETF serves as an alternative to stocks in a bear market, though it carries interest rate sensitivity and volatility. If interest rates decline, the share price could see significant upside potential [5][6] - **Vanguard Consumer Staples ETF (VDC)**: This ETF invests in defensive stocks that typically experience less decline than the S&P 500 during market corrections. For instance, in 2022, while the S&P 500 fell over 18%, this ETF only dropped less than 2%, providing substantial downside protection [7] - **Vanguard Total Bond Market ETF (BND)**: This ETF offers a standard hedge against equity portfolio risk, encompassing a broad range of investment-grade bonds. It has lower interest rate sensitivity compared to the Extended Duration Treasury ETF and is likely to provide protection and risk mitigation during bear markets [8][9][10]