With a bull market in U.S. stocks lasting three years, it’s wise to explore ways to protect gains. Investing in bonds and low-volatility stocks can help reduce portfolio risk. Three Vanguard ETFs offer varying levels of downside protection and risk reduction in a potential bear market.
Investors are showing genuine fear of a bear market in stocks for the first time since 2022. While the S&P 500 remains flat in 2026, value, dividend, and international stocks are outperforming. Concerns about the job market, affordability, and tariffs may make stocks vulnerable to a correction.
To prepare for potential volatility in your portfolio, consider investing in Vanguard ETFs. The Vanguard Short-Term Treasury ETF (VGSH) focuses on shorter-term bonds with a 3.6% yield. The Vanguard Total Bond Market ETF (BND) offers diversification in investment-grade bonds with a 4.2% yield. The Vanguard U.S. Minimum Volatility ETF (VFMV) invests in low-volatility stocks to reduce downside risk.
While Vanguard ETFs can provide some cushion in a bear market, they don’t guarantee protection. With concerns about a market correction, diversifying away from tech stocks could prove beneficial. Consider your goals and risk tolerance when choosing ETFs for your portfolio.
Before buying stock in Vanguard Total Bond Market ETF, note that it wasn’t among the 10 best stocks identified by the Motley Fool Stock Advisor team. The top 10 stocks recommended by the team have historically delivered significant returns compared to the market. Consider joining Stock Advisor for access to their latest recommendations.
Read more at Nasdaq: 3 Vanguard ETFs to Buy to Protect Your Portfolio From a Potential Stock Market Crash
