We have some exciting news to share! The Motley Fool UK has now become The Twelfth Magpie -- an independent, UK-owned company, led by our long-serving UK management team — Mark Rogers, Chris Nials and Heather Adlington. In practical terms, it’s the same team you know, now fully focused on serving our UK readers and members.

Just as importantly, our approach remains unchanged: long-term, jargon-free, and on your side. This site is our new home, and there will be extra tweaks made across the coming few days as we settle in. So if anything looks a little off, please bear with us!

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Here’s how a stock market crash could help you retire years earlier

A stock market crash is quite unpleasant – but for the well-prepared investor, it’s a rare and wonderful opportunity to accelerate their wealth.

| More on:

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

With fears of a looming economic slowdown or even a full-blown recession on the rise, predictions of a new stock market crash in 2026 have once again started to emerge.

It goes without saying that a crash isn’t a particularly pleasant experience, especially for those going through it for the first time. However, with the right strategy, investors can use the volatility to propel their portfolios to record highs and drastically expand their wealth. Here’s how.

XXX

Volatility creates opportunity

Let’s assume the worst and say the stock market suddenly falls 20% next week as investors start to panic about the geopolitical and economic climate, selling off their stocks. As a consequence, index fund investors see a large chunk of their portfolios get wiped out quickly while stock pickers likely endure even more volatility with some of their stronger growth positions falling more than 50%.

While not a market crash, that’s precisely what happened during the 2022 US market correction, with growth stocks like Amazon (NASDAQ:AMZN) falling by 55% over the space of a year.

Uncertainty about inflation, combined with a rapid rise in interest rates and a cost-of-living crisis, hit businesses across the board four years ago. And while the catalysts for a potential crash in 2026 are different (tariff inflation, supply chain disruptions, rising unemployment and steep valuations), it would nonetheless create a similar long-term opportunity.

Instead of recognising that Amazon’s long-term strategy and growth potential weren’t compromised by temporary macroeconomic uncertainty, most investors rushed for the exits and sold their Amazon shares.

Yet the intelligent long-term investors who recognised the bargain that the market volatility had created scrambled to buy Amazon shares while everyone else was selling. The result? Since December 2022, Amazon shares have almost tripled as the economies started recovering.

As Amazon demonstrates, while scary, capitalising on these rare and wonderful buying opportunities opens the door to fantastic market-beating returns. And more importantly, it accelerates the wealth-building process, allowing some investors to potentially retire much earlier.

Still worth considering in 2026?

As we enter 2026, Amazon shares are once again looking a bit frothy with a price-to-earning ratio of 35. That’s certainly not as high as it was back in late 2021, but it does open the door to elevated volatility if something goes wrong. And there are a few potential weak spots for investors to dig into.

A big concern is the group’s aggressive capital expenditure plans for upgrading and rolling out new data centres and AI infrastructure. For the time being, AI demand’s proving to be a handy tailwind for its hyperscaler services.

But if companies begin pulling back on AI initiatives due to a lack of tangible value creation, Amazon could end up with capacity underutilisation issues.

As for the e-commerce side of the business, a slowdown in consumer spending equally doesn’t bode well. And we’ve already seen some weakness start to creep in, with its July and October 2025 Prime Day sales failing to meet expectations.

Nevertheless, the latest results show encouraging momentum for its data centre arm, and its long-term e-commerce trajectory still looking strong, Amazon shares could definitely be worth a closer look. Especially if the stock market does indeed decide to throw a tantrum later this year.

Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Friends and sisters exploring the outdoors together in Cornwall. They are standing with their arms around each other at the coast.
Investing Articles

£503 buys 14 shares in this FTSE 250 stock that returned 23.9% annually for the last 15 years

This FTSE 250 stock has averaged a huge return for 15 years. At today's price, £503 buys 14 shares. But…

Read more »

Black woman using loudspeaker to be heard
Investing Articles

£1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years

This FTSE 100 mining stock has returned close to 30% a year for a decade. At 3,995p, £1,000 buys 25…

Read more »

Female student sitting at the steps and using laptop
Investing Articles

Down 47%, is this growth stock finally worth buying in May?

With a £288m order book and a hidden pipeline of defence and nuclear contracts, is this growth stock now too…

Read more »

House models and one with REIT - standing for real estate investment trust - written on it.
Investing Articles

2 REITs yielding 7%+ to consider for passive income in 2026

A REIT backed by the NHS and another backed by Tesco and Sainsbury's with both yielding 7%+. Here's why I'm…

Read more »

Woman riding her old fashioned bicycle along the Beach Esplanade at Aberdeen, Scotland.
Investing Articles

Just 97 shares of this UK dividend stock generate £238 in passive income

A 5.7% yield, £238 in passive income from just 97 shares, and one of the most divisive dividend stocks on…

Read more »

ISA coins
Investing Articles

£10,000 in an ISA generates a second income of…

The London Stock Exchange is home to some of the world's most generous dividends. But how big a second income…

Read more »

Shot of a senior man drinking coffee and looking thoughtfully out of a window
Investing Articles

Expert recommendations: 2 top income stocks yielding 7%+!

With yields of 7.2% and 7.8% respectively, these two income stocks are catching the eyes of institutional analysts. Should investors…

Read more »

Illustration of flames over a black background
Investing Articles

3 top income-focused stocks to buy in May 2026, according to experts

Looking for a stock to buy for income in May 2026? Experts have flagged these three UK dividend shares as…

Read more »