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Is a 2026 Market Crash Likely?

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  Published in Stocks and Investing on Saturday, January 24th 2026 at 3:08 GMT by 24/7 Wall St.
      Locale: UNITED STATES

The Looming Question: Is a Market Crash in 2026 Likely?

The sustained market rally of recent years has naturally fueled speculation about a potential downturn. Several factors contribute to this apprehension. Persistent inflation, while moderating, remains a concern. Geopolitical instability continues to introduce uncertainty into the global economy. And the lingering effects of rising interest rates could impact consumer spending and corporate profitability. While a dramatic crash isn't inevitable, the possibility warrants careful consideration and strategic portfolio adjustments.

Building a Resilient Portfolio: The Core Strategy

The most effective defense against market volatility isn't to try and time the market (an almost impossible feat), but to build a portfolio centered around companies exhibiting resilience and delivering consistent value. Diversification is key, but diversification with purpose. Choosing companies with strong fundamentals, a history of navigating challenging economic environments, and a clear path to future growth can significantly reduce your exposure to downside risk.

Three Stocks to Consider:

• Costco (COST): The Recession-Resistant Retailer Costco's business model isn't based on luxury goods; it's built on providing value. Their membership-based warehouse club format fosters intense customer loyalty, and the company's emphasis on offering competitive pricing on essential goods creates a "need-to-have" dynamic rather than a "nice-to-have." This makes Costco remarkably resilient during economic downturns. While discretionary spending might decline, consumers still need to purchase groceries and other necessities. Beyond the core business, Costco's private-label brand, Kirkland Signature, consistently receives high ratings and commands strong customer preference. Analysts often point to Costco's impressive inventory management and efficient operational practices as key contributors to its consistent profitability, even during periods of economic contraction. The renewal rates of Costco memberships are a critical indicator of the company's enduring value proposition.

• NextEra Energy (NEE): Powering Through Uncertainty with Renewables NextEra Energy is a leader in the electric and natural gas utility sector, and critically, a major player in renewable energy generation. Utility stocks are historically considered defensive investments because they provide essential services - electricity - regardless of economic cycles. People need power, making demand relatively stable. NextEra's significant investment in wind and solar energy positions the company favorably for long-term growth. Government incentives and increasing societal demand for renewable energy sources will likely continue to support NextEra's expansion. Furthermore, regulated utility structures often provide a degree of predictability regarding revenue streams. However, investors should be aware of the potential for regulatory changes and their impact on NextEra's profitability.

• Prologis (PLX): Benefiting from the E-Commerce Boom (and Beyond) Prologis stands out as a Real Estate Investment Trust (REIT) specializing in logistics facilities. These facilities are the backbone of the global supply chain, and their importance has been amplified by the continued surge in e-commerce. As online retail expands, the demand for strategically located warehouses and distribution centers will only increase. Prologis benefits not only from the e-commerce boom but also from broader trends in supply chain optimization and nearshoring initiatives. The company's focus on modern, technologically advanced facilities provides a competitive advantage. Prologis's history of consistent dividend growth makes it an attractive option for income-focused investors looking for a relatively stable return. While REITs are sensitive to interest rate fluctuations, Prologis's strong cash flow and high-quality portfolio help to mitigate some of that risk.

Important Considerations & Disclaimer

Investing always involves risk. Market conditions can change rapidly, and past performance is not indicative of future results. This article is for informational purposes only and should not be considered financial advice. Always conduct thorough research and consult with a qualified financial advisor before making any investment decisions. Diversification is crucial, and these stocks should be considered as part of a well-balanced portfolio, not as standalone investments.