If a Stock Market Crash Is on the Horizon, History Says Investing in This 1 Thing is the Smartest Opportunity Right Now

U.S. GDP growth is slowing, while participation in the labor market remains historically low.

Analyzing the performances of stocks during recent crashes shows a clear pattern.

Smart investors understand that investing through volatility can be a winning strategy in the long run.

The U.S. economy currently presents a mixed bag. Real gross domestic product (GDP) expanded at an annualized rate of just 1.5% during the second quarter -- a deceleration from 2.1% in the first quarter. The labor market has also cooled noticeably: Nonfarm payrolls rose by only 57,000 in June , while the unemployment rate ticked down to 4.2% and the participation rate fell to 61.6% -- its lowest level in more than five years.

Meanwhile, geopolitical tensions in the Middle East have repeatedly jolted oil and energy markets, feeding inflation pressures that ripple through transportation, manufacturing, and consumer goods.

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Even with all of this uncertainty, the S&P 500 (SNPINDEX: ^GSPC) has continued climbing to new highs. Nevertheless, the combination of decelerating economic growth, softer hiring, and energy volatility is leaving many investors wondering whether a crash could arrive at a moment's notice.

A stock market crash is typically defined as a rapid decline in stock prices, often exceeding 20% from recent peaks, and can last for weeks or even months. A crash differs from ordinary corrections in both speed and depth and is usually triggered by a sudden loss of confidence that ripples through leveraged positions, forcing panic selling.