![\"Concept](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2026\/02\/Data-centre-1200x675.jpg\")
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Image source: Getty Images<\/p>\n
With many global stocks trading at historically high multiples and speculation about the existence of an artificial intelligence (AI) bubble, some believe equity markets are over-heating.<\/p>\n
For many investors, a crash would be bad news. However, for others, it could be an opportunity to dramatically improve their long-term wealth.<\/p>\n
Panic!<\/p>\n
Full of human frailties, investors are no different to the population at large. A stock market crash is often triggered by an irrational reaction to an individual event, resulting in a strong desire to escape the chaos by selling shares.<\/p>\n
Eventually, a feeling of calm will return and, although it might take a while, a recovery will get underway. That\u2019s what history tells us, anyway. This can be seen from the chart below which tracks the performance of the UK stock market following five famous crashes.<\/p>\n
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Source: Hargreaves Lansdown<\/p>\n
And for those with a bit of spare cash, an over-reaction brings about an opportunity to go shopping for bargains. That\u2019s why I think it\u2019s always a good idea to maintain a watchlist of shares.<\/p>\n
A look back in time<\/p>\n
For example, those who were keeping an eye on Scottish Mortgage Investment Trust (LSE:SMT<\/a>) \u2014 and bought the stock after the bursting of the dot com bubble \u2014 have been handsomely rewarded.<\/p>\n From March 2000 to October 2022, the trust\u2019s share price fell 46%. Just over three years later, it had recovered all of its losses. Today (13 February), the shares are changing hands for around 22 times more than their 2022 low.<\/p>\n Of course, it\u2019s impossible to time the market as precisely as this. But it does show the potential benefits of taking a long-term view<\/a>.<\/p>\n History repeating itself<\/p>\n And if, as some predict, there\u2019s an artificial intelligence (AI) meltdown, it\u2019s likely to suffer more than most. That\u2019s because it invests in high-growth stocks, predominantly in the tech sector. But it has a good track record. From 2016-2025, its share price increased 351%, comfortably beating the performance of the FTSE All-Share index.<\/p>\n One concern that\u2019s been expressed is the trust\u2019s heavy exposure to private companies (35.1% of assets at 31 December 2025). This creates two potential problems. Firstly, it\u2019s difficult to accurately value these shares. Secondly, it\u2019s hard to quickly turn these shareholdings into cash, which could be a problem if there\u2019s an urgent need for liquidity.<\/p>\n Having said that, the group\u2019s most valuable holding is SpaceX. It seems likely that Elon Musk\u2019s group will IPO in the summer. If it does, SMT could be a major winner.<\/p>\n Final thought<\/p>\n