Image source: Getty Images The maximum annual allowance for a Stocks and Shares ISA currently stands at £20,000. If I’d accumulated that much, I’d certainly consider deploying it into stocks today. That’s because most markets — particularly the major US indexes — have fallen substantially. These massive drops in the stock market seem to happen every decade or so on average. Although they could happen more or less often than that, and usually without warning. But stock markets — whether in the US or UK — have an amazing track record. They’ve recovered losses from every crash and downturn in history, then powered upwards to reach new heights. Though not psychologically easy to do, investing in the stock market during downturns can be very lucrative indeed. As Warren Buffett famously said: “I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.” There’s certainly a lot of fear among investors today. So I’d be buying when others are selling. And here’s where I’d be looking. Across the pond Home to many of the greatest companies on earth, the US stock market is far and away the largest in the world. It’s rare that the indexes there drop massively. But that’s what happened in 2022. It was the worst-performing year since 2008. Index Performance in 2022 (excluding dividends)S&P 500-19%Nasdaq 100-30%Dow 30-9% The Nasdaq 100 performance in 2022 was the worst in its history. The tech-heavy index contains stocks such as Microsoft, Apple and Amazon. All are way off their all-time highs, and the prices today could be seen as bargains in the future. I doubt these tech behemoths are going to disappear any time soon. All have the wherewithal to survive any economic downturn. So I’d consider adding some fallen US giants. FTSE 100 dividends In 2022, the FTSE 100 was the world’s best-performing major index. I should qualify that by saying it finished basically flat, which might not sound impressive. But it’s better than finishing down in double digits as two of the three US indexes did. And I’d have collected dividends, with the UK blue-chip index yielding 3.5% on average. That’s nearly double the S&P 500 yield of 1.8%. Of course, income from dividends isn’t guaranteed. Dividends can be cut by companies to preserve capital. This risk is high with a looming global recession. But if I were looking for dividend stocks, I’d certainly begin in the UK stock market. Diversification Whichever stocks I chose to buy in my Stocks and Shares ISA, I’d make diversification my key priority. Not just in terms of the number of stocks, but also in terms of sector and size. Owning 25 penny stocks isn’t being diversified. Neither is owning 25 software or biotechnology stocks. It’s not the amount, but the range. Nobody knows for certain in advance which sectors will perform (or not). That’s why diversification matters so much. But with many share prices down significantly, now is an ideal time to start bargain hunting.