The only answer I heard that is non-trivial is "skills". Not very satisfying, I know. But investing in skills that the future me might use, regardless of what the market does, is probably worthwhile.

SPY, the largest S&P 500 ETF right now is at $287.51. For $2335 today, you can buy the right to sell 100 shares of SPY for $285 in December 2020. That means that if the price in December 2020 (or any date in between) is less than $261.65 ($285 minus the cost of the option itself), you can exercise your option and make $100 for every $1 the price falls below $261.65. If say, the price falls to $230, you make $3100, or 32% on your investment.

If you're fairly sure the price will say above $200, you can simultaneously sell the option to sell at $200 on the same date for $505 and discount your total trade to $1835. This would become what's called a put "spread". If you purchased this spread and the price fell to $230, you'd make ($285 - $18.35 - $230) * 100 = $3665, for a 100% return. However if the price fell to $150, you'd only make ($285 - $18.35 - $200) * 100 = $6665 rather than ($285 - $18.35 - $150) * 100 = $11665, as you'd have to pay the person who bought the $200 option from you the difference.

If the price goes up, all you lose is the cost of your option, which is unlike shorting, where you lose $1 for every dollar above your sell price the stock moves.

If you buy an option (or spread) with a closer expiry, you'll pay a lot less but of course have a lot less time to be right. You can also sell an option much closer to your own, for example a $245 option for $1200, in which case you'd pay $1335 for your $285 option.

The Goldman Sachs Commodity ETF (symbol GSC) is an easy way to invest in a diverse set commodities. Many other funds are targeted (eg, oil or gold).

iShares Core U.S. Aggregate Bond ETF (symbol AGG) is the largest bond ETF. There are many others.

You can always stuff cash in your mattress.

As others suggest, you can also short the market. Shorting housing for a small investor is not super easy.

Diversified long term buy and hold investing in stocks regardless of current conditions has historically been a great bet.

That’s a big correction in historical terms, but it only sets the market back to summer of 2017. We could easily have been having this conversation in the summer of 2017.

That said, if you have decent conviction you probably want cash and close case substitutes (e.g. short term high quality debt) so you can take advantage of any big drop as a buying opportunity.

- real estate

- gold

- US treasuries

- corporate bonds

- municipal bonds

- bitcoin

- cash

I'd suggest that the number you should be concerned about isn't a stock market index, but inflation. Inflation drives everything else. Inflation is also complex and hard to measure.

Some will tell you to invest in "bonds," but be careful. What they usually mean is "treasuries."

During recessions, interest rates usually fall. But the yield on your treasury remains constant. As a result, your treasury increases in value if you decide to sell. Or you can hold and enjoy a higher-than-market interest rate. This effect is amplified the longer the maturity of the treasury. For example, a 30 year bond will increase in value much more steeply than a 5-year bond given the same relative drop in rates. This effect plays a role in "yield curve inversion."

Treasuries are generally considered the least risky bet, but they aren't without risk. It wasn't too long ago that US debt was downgraded by S&P during a nasty debt ceiling brawl. (Ironically, treasury bond prices shot up in response, but that's another topic altogether.) The debt hawks have been quiet, but that can change given the current political volatility in Washington.

Corporate bonds should be considered a different animal, with a large spread in risk. The worse off the company, the worse its bonds will generally perform. Or you may end up with a total loss in extreme cases. Buying corporate bonds requires the same skill and attention to detail as buying stocks, but potentially more so. Your return is tied to the company's path through the recession. Not for the casual investor.

Municipals are also different. Cities can't print their way out of recessions like the US federal government can. Ditto states. When the economy goes south, so does the tax base and tax revenue. The risk of default increases even as the advantage of a relatively high yield also increases.

Gold's performance in recent recessions has been so-so at best. It skyrocketed in the late 70s recession, but that one was coupled to high inflation.

Cash has the advantage of being highly-liquid. But you can still lose money holding cash due to the inexorable march of inflation.

Bitcoin is currently untested in a US recession. However, its performance in financial meltdowns around the world in the last 5 years has been lackluster at best.

Safest bet and something which doesn't require any expertise - hold cash.

The other extreme is to buy LEAPS [1]. They are a cheap alternative to protecting your downside.

Now obviously both these two things are not full proof and have their ifs and buts.

Cash will lose value due to inflation. But at a slower rate than losing in a crash.

LEAPS are mostly 2-3 years out so if the crash doesn't happen you will lose your premium. But again a small price paid to save your downside.

There is one thing to stay away from is Bitcoin or cryptocurrency.

Gold has gone down in last 5 years. So, it still maintaining a slight negative correlation to stock bull market runs.

On the other hand, the supposed gold like bitcoin has gained lot of it's value in the last bull run. So, I am not convinced that there is an argument that bitcoin will hold when we start going into a crash.

[1]: https://en.wikipedia.org/wiki/LEAPS_(finance)

All in all, cash is not an investment. So this is a matter of spreading the risk appropriately. This depends on a lot of things.

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