Jan 30, 2025
Mark Spitznagel wasn’t surprised when US$6.4 trillion was erased from global stock markets this August 2024. The dramatic losses were driven by interest rate volatility and investor fears over slowing growth in major economies like the U.S. and China. As of April 2025, markets have only partially recovered, with continued instability linked to geopolitical tensions and corporate earnings compression.
For Spitznagel, a noted Wall Street “permabear” — a term used to describe an investor who assumes the value of stocks and shares will fall regardless of market conditions — it was a situation he'd anticipated. In the past he'd warned of a major market crash due to the "greatest credit bubble in human history." As he stated: We are on the verge of a Black Swan event (an unpredictable occurrence with a significant impact that wasn't widely predicted) and on the precipice of a major market correction.
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For those unfamiliar with Spitznagel, he is the billionaire investor and hedgefund manager who correctly predicted the stock market crashes in 2008 and 2000. With this in mind, he is now warning all investors to consider the risks that exist in today's economic environment — and advising investors to prepare for the impending storm.
Why Mark Spitznagel predicts stock market crash
Mark Spitznagel recently told Business Insider that he believes the “worst market crash since 1929” is coming.
As the Chief Investment Officer (CIO) of Universa Investments, Spitznagel’s biggest concern is how prominent debt is in all financial decisions — from day-to-day consumer choices to federal initiatives.
“Credit bubbles end. They pop. There's no way to stop them from popping,” he said, adding that the Fed has brought the economy to a place “where there’s no turning back.”
Spitznagel’s advice: Don’t chase returns. Instead, he suggests investors build a portfolio that can withstand market crashes and dips. To help, here are some tips on building a recession-proof portfolio.
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How to prepare your portfolio in case of a market crash or recession
The first step to preparing your portfolio is to consider how diversified your holdings are in terms of assets, sectors, geographic regions and market cycles.
For instance, most investors are advised against holding an all-equity portfolio. Instead, a balanced portfolio is preferred as it allows investors to capitalize on market appreciation, but hold steady with bonds and alternative investments should economic conditions weaken.
While stocks and bonds are the standard assets to hold in a balanced portfolio, other alternative investments are now growing in popularity. To help you choose, here’s a list of the three most popular alternative investments that can help your investment portfolio stand strong against any market storm.
Art as a hedge against a market crash
If you’re looking to diversify your portfolio outside of real estate, consider an alternative asset like fine art. Masterworks is making this inflation-hedging asset — which has historically been reserved for the ultra wealthy — accessible through their platform.
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With real estate group buying, you can purchase shares of iconic works of art and benefit from their diversifying ability, without needing to shell out millions of dollars at an auction.
It can also pay to keep some cash on hand. Cash reserves in your portfolio could be the difference between you holding fast through market turmoil or you having to sell your investments at a loss.
Gold as a hedge against a market crash
Gold has long been considered a safe haven asset. This precious metal is an investor favourite, particularly when there is market uncertainty.
Despite persistent inflation throughout 2023 and 2024, gold prices reached new highs in March 2025, exceeding C$3,800 per ounce, as investors sought safe haven assets amidst inflation concerns and global instability.
While Canadian investors can purchase gold bars, coins, or bullion through Silver Gold Bull, most choose to invest in gold stocks or an ETF that tracks the price of gold. The best way to do this is to open a discount brokerage account.
Real estate as a hedge against a market crash
If you have enough cash, you could simply buy an investment property in one of Canada’s sought-after rental markets. But it’ll cost you.
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Another option is to invest in real estate investment trusts (REITs). A REIT allows you to invest in a company that owns, operates and earns a profit off of real property. By investing in REITs, you get exposure to real estate earnings and appreciation without having to manage or finance the properties, personally.
For investors who want a hedge against equity market downturns, consider REITs. In 2025, REITs that focused on data centers, logistics hubs, and residential rental markets were outperforming traditional retail-focused REITs, due to higher rental yields and increasing demand for digital infrastructure and housing. Like gold ETFs, a good way to purchase and sell REITs is to open an account on an online trading app.
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There are also several real estate investment crowdfunding platforms available in Canada such as NexusCrowd, addy Invest, Equivesto, BuyProperly and Willow.
Bottom line
While Spitznagel’s dire warning echoes long-term concerns about debt bubbles, recent economic data tells a more nuanced story. The U.S. economy grew at an annualized 2.1% in Q1 2025, and inflation in Canada dipped to 2.6% in March 2025, offering room for cautious optimism. Still, investors should remain vigilant in a highly polarized economic environment.
If Spitznagel's predictions of a market crash come true, Canadians who are overly concentrated in equities may face significant losses. To protect your investments, consider adding alternative assets to your portfolio, including real estate, commodities and international exposure in markets less correlated with North American economies, as they could provide a safety net, as well as gold and fine art investments.
For Canadians looking to build a crash-proof portfolio, focusing on diversification across asset classes is critical. Additionally, engaging with a qualified financial adviser who can help build a portfolio that aligns with long-term financial goals while preparing for potential market volatility, can go a long way to creating a balanced, market-proof portfolio, as well as providingpeace of mind.
Sources
1. BNN Bloomberg: US$6.4 trillion stock wipeout has traders fearing ‘great unwind’ is just starting (Aug 5, 2024)
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Romana King is the Senior Editor at Money.ca. She writes for various publications, and her book -- House Poor No More: 9 Steps That Grow the Value of Your Home and Net Worth -- continues to be an Amazon bestseller. Since its publication in November 2021, this book has won five awards, including the New York CPA Society's Excellence in Financial Journalism (EFJ) Book Award in 2022.
