How to Survive a Stock Market Crash... And Readers Weigh In on 'Good Enough' Consumer Tech

With the market rising, if you are heavily invested enough to have seen your retirement account get clobbered, it's easy to wipe the sweat from your brow and think you just survived something horrible... But only a fool would think the worst is over... That's why I'm dusting off something I first wrote in 1995 […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily] How to Survive a Stock Market Crash... And Readers Weigh In on 'Good Enough' Consumer Tech By Herb Greenberg --------------------------------------------------------------- [NOW Is the Moment You've Been Waiting For]( On August 29, a historic unveiling in Houston, Texas could reshape the stock market and create a wave of millionaires on a single investment. [Learn more here (includes free stock ticker)](. --------------------------------------------------------------- With the market rising, if you are heavily invested enough to have seen your retirement account get clobbered, it's easy to wipe the sweat from your brow and think you just survived something horrible... But only a fool would think the worst is over... That's why I'm dusting off something [I first wrote]( in 1995 when I was a columnist at the San Francisco Chronicle, headlined, "Save This Column and Don't Use It Until the Market Crashes." It was a list of 13 promises investors should make today to avoid costly mistakes later –promises I said they should put in an envelope marked "to be opened only in the event of a crash." The column quoted three financial pros I had gotten to know: the late Robert Stovall, who had been a widely quoted markets strategist... Ken Fisher of Fisher Investments... and Kurt Brouwer, who ran an investment advisory firm in the Bay area and is now retired. I hadn't thought about that column again until 2013... At the time, I was working at CNBC. I had received a letter from a reader in Hawaii who said the "13 commandments," as he calls them, helped him "become a millionaire." He had read it in the Honolulu Star-Bulletin, which ran my syndicated column. We're talking very simple, common-sense rules to remember in a market crash, among them... - I am a long-term investor and I know the stock market always comes back. I will sleep secure knowing history is on my side. - I will make sure anything I buy was hit by the decline. In other words, I won't buy anything that didn't go down, because it probably won't go up. I want to use a big market break to buy quality stocks cheaply. - I will not read, listen to, or believe negative stories during the crash. I know things are never as good as they seem when you're winning, and never as bad as they seem when you're losing. The blessed media will probably be uniformly negative if we have a real barn burner of a crash. - I will not change my investment objectives while the stock market is down. Nor will I become a "safety first" investor under emotional duress so that I decide to sell stock funds and buy money market funds. I will either maintain the same asset mix or consider adding to the stock funds. --------------------------------------------------------------- Recommended Link: [New EV Set to Disrupt Entire Industry]( The Wall Street Journal calls it "an American manufacturing triumph." – [Will this disrupt the entire $1.3 trillion EV boom]( --------------------------------------------------------------- Of course, there's the obvious question today... Given the nature of the markets, with changes in market structure and an overall different market characteristic than 27 years ago, do the same rules apply today? When I asked all three financial pros in 2013, they gave a resounding "yes." But there are some caveats. For example, one of the rules said... I will remember to sell high and buy low. If the market crashes, I will move money from cash equivalents (Treasurys, etc.) into stocks with every 50-point drop in the Dow or five-point drop in the S&P 500. (Do the reverse when the market hits new record highs.) [And remember, those were 1995 benchmarks. Adjust accordingly for 2013.] Keep in mind that what we have today isn't that market, given the level of the indexes and other changes in market structure, so adjust accordingly. Stovall, who was known for his common sense and wit – and whose son Sam has replaced him as a media maven – added: You have a situation in which all but 20% of trades are done automatically. The specialist system is broken or disappeared. You don't have the same type of market structure you had when I was doing this a generation ago. So, you have to shift gears and accept the new realities and go from there. But the original theories still hold true. Wisely, Stovall added that unlike what then was a generation ago... You have to adjust your thinking day to day... You have to consider that volatility with a big "V" is a fact of life. He went on to say that on average, markets recover from 5% to 10% pullbacks within two months, while it jumps up to four months for 10% to 20% declines. As he put it, "This isn't that bad, it just feels bad when they're grinding at you." Don't lose sight of the fact that Stovall said that nine years ago, when the most recent bull market was just getting started. Key to his comment was the phrase "on average," because every now and then there are also dot-com-type busts. Still, for investors with the time, discipline, and stomach to hang on, assuming you own high-quality companies, Stovall's final point is one that never goes out of style... When the markets get rocky, "you watch the 'fasten the seatbelt' sign, not the 'put on a parachute and assemble by the door' sign." Not that having a parachute handy isn't a bad idea, either. As I wrote when I interviewed him that last time: "Even if you never use it – it's comforting to know it's there." Yes, yes, I know, this is all easier in principle than in practice... But it worked for that one reader in Hawaii, and maybe it'll work for you, too. Moving on to the mailbag... Readers had quite a few comments regarding [my essay]( on whether consumer technology has hit the point where it's "good enough"... "Herb, great article on good enough technology. There comes a point in time when I can do everything I need to do online without having to have the latest new technology. I gave up my smart phone for a flip phone because I only used the phone for making and receiving calls. I prefer a computer keyboard and screen for using the Internet. I do not have to check my e-mail every few minutes. I set a time period each day for viewing e-mails that are not work related. I normally do not use any electronics on the weekend. I call it my sabbath time and allows me to do things with my family, enjoy the outdoors, attend church, and socialize with friends." – Joe E. Herb comment: Congrats, Joe... I'll put what you do in my "aspiration" bucket! "Totally agree with you Herb on when is 'Good, Good Enough.' My old laptop is still giving me excellent response time and service. Why change when it is humming right along." – Hubert O. Herb comment: Hubert, I do confess to liking "new" and look forward to getting rid of any risk of fans humming in the background with my next upgrade. (However, I did add considerably more memory than I'll ever need to this MacBook, to minimize that annoyance... and it worked!) "Hi Herb, while I agree that we're getting to an interesting point in the Moore's Law curve, I disagree that we've hit a maximum in terms of performance. Software is getting more and more complex, so we will definitely need more powerful computers as time goes on. Transistors are only part of the story because we've learned to start finding that extra power, or perceptual improvements in performance, through other means such as: GPU, Monitors, RAM, SSD Drives, etc... "I think we may see a decrease in the rate of upgrades but nothing crazy that goes past 3-4 years. Planned obsolescence exists, and operating systems become unsupported and insecure quickly." – Greg M. Herb comment: Greg, I agree... And in the end, that is always the ultimate push. But the need to upgrade – or the level of planned obsolescence – is definitely being pushed out. As always, feel free to reach out via e-mail by [clicking here](mailto:feedback@empirefinancialresearch.com?subject=Feedback%20for%20Herb). And if you're on Twitter, feel free to follow me there at [@herbgreenberg](. I look forward to hearing from you. Regards, Herb Greenberg July 15, 2022 If someone forwarded you this e-mail and you would like to be added to my e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2022 Empire Financial Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Empire Financial Research, 601 Lexington Ave., 20th Floor, New York, NY 10022 [www.empirefinancialresearch.com.]( You received this e-mail because you are subscribed to Empire Financial Daily. [Unsubscribe from all future e-mails](