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Noteworthy financial commentators, including Scott Galloway (1), Michael Burry and Ray Dalio, have compared current stock market conditions to those in 1929, 1987 and 1999 just before massive corrections.
As of August 2026, the S&P 500’s price-to-earnings ratio has jumped above 30, a level that was last seen “from late 1998 to the close of 2002 during the dot-com craze,” according to Fortune (2).
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Simply put, if you’re feeling anxious about the stock market, you’re not alone. And if you’re a retiree who depends on market returns for withdrawals, this could be a good time to stress-test your portfolio. Here are three red flags that are worth resolving if you’re trying to prepare for a potential market crash.
Margin debt
Ordinary investors are so confident about the market’s recent boom that they’ve started borrowing money to invest even more. Margin debt exploded roughly 50% over the past year, going from $1 trillion to $1.5 trillion over the twelve months ended June 2026, according to FINRA (3).
While leverage can magnify gains, it can also amplify losses when the market takes a bad turn. In retirement, this risk is particularly acute. This could be the right time to consider paying off any margin loans or reducing your exposure to leveraged ETFs. Minimizing debt could bolster your portfolio.
Overconcentration
The stock market is already deeply concentrated. The ten largest companies in the S&P 500 (mostly familiar tech giants) now account for 40% of the index’s total capitalization, according to UBS (4). The index “is more concentrated than at any point since the late-1990s tech bubble,” says the investment bank’s report.
Simply put, if you’ve followed traditional advice and put much of your savings into low-cost index funds, you’re now over-exposed to the AI and tech boom. A little diversification could help.
