My Three-Day Rule for Investing: And If it Applies Now
I've seen a lot in my career. Here's what I see now in the stock market.


I am long on record as an extreme skeptic of doom-loop and daisy-chain scenarios, where action A causes market reaction B and then investments C, D and E crash as traders and investors lose nerve and everyone's portfolios drown in a flood of madcap selling.
For 40 years, I have written that it is dumb to make quick portfolio decisions based on political and international events. And I have been correct to believe that when reliable investments get indiscriminately slammed, there is enough smart money to undo some of the damage.
That is the DNA of my three-day rule, which holds that in any news-driven plunge, sober-minded buyers will arrive in roughly 72 hours wielding significant sums of cash.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The exception was the crash of 2008, and that was because multiple banks went bust and Wall Street had no rescue money. Bank failures and widespread bond defaults are crushing. Fortunately, with the U.S. economy borderline booming entering this year, the banks seem sound.
But the trade war and, worse, the utter confusion about what it is supposed to achieve and on what timetable stand to undermine all my time-tested doctrines. I wish I were confident that financial markets will push back enough to influence the policymakers.
But all indications say that this is not a three-day story. S&P 500 companies earn 40% of their profits outside the U.S. And America's fixed-income markets depend more than before on overseas buyers looking for higher yields along with the comfort of owning debts denominated in strong dollars.
For now, I expect a rush to find both relative protection from the protectionists and the most-secure cash flows. The consensus is that economic growth will slow if not roll over into a recession, and inflation will head back up above 3%.
Long-term interest rates may fall further for a while on fear, but this stagflation implies they will eventually climb. Do not fall for the temptation to buy long-term Treasuries or bond funds, including high-yield bonds, which are closely correlated to stock prices. Feel free to lighten up on those assets, too.
The least bad options
So, then, what else do I suggest? I'll highlight four ideas that start with D – as in detergent, diesel, dividends and dollars (meaning cash and cash equivalents). But even these might be just the least bad options.
In early April, as shell-shocked shareholders watched the stock market disgorge trillions of dollars, detergent, which is shorthand for Procter & Gamble (PG) and other makers of consumer staples, withstood the worst, as did utilities and high-dividend names such as AT&T (T) and Verizon (VZ).
Low-volatility dividend funds such as the Franklin U.S. Low Volatility High Dividend Index (LVHD) and the Federated Hermes Strategic Value Dividend (SVAAX) are keepers.
Diesel, by which I mean fuel handlers such as pipelines, is under pressure from fast-falling oil prices. But the cash flows from the volume of energy use are reasonably predictable, so you can expect high dividends.
The best D of all for now is dollars, as in cash or ultra-short-term bond funds such as the Fidelity Low Duration Bond Factor (FLDR).
The Federal Reserve may cut interest rates in the coming months to support employment, so you might be wise to lock in CD and Treasury-bill ladders sooner rather than later.
But there are no sure things in the short run. I've seen a lot in my long career. This breaks the norms.
This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related Content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Kosnett is the editor of Kiplinger Investing for Income and writes the "Cash in Hand" column for Kiplinger Personal Finance. He is an income-investing expert who covers bonds, real estate investment trusts, oil and gas income deals, dividend stocks and anything else that pays interest and dividends. He joined Kiplinger in 1981 after six years in newspapers, including the Baltimore Sun. He is a 1976 journalism graduate from the Medill School at Northwestern University and completed an executive program at the Carnegie-Mellon University business school in 1978.
-
The Most Tax-Friendly State for Retirement in 2025: Here It Is
Retirement Tax How do you retire ‘tax-free’? This state doesn’t tax retirement income, has a low median property tax bill, and even offers savings on gas. Are you ready for a move?
-
Plan for Higher Health Care Costs in 2026: Projected Medicare Part B and Part D Premiums
In 2026, Medicare participants will pay more for their health care. Part B costs are expected to rise more than 10%. Here's what you can do.
-
Avoid Medicare's 'Shadow Tax' With This Financial Expert's IRMAA-Busting Tips
You're cruising along in retirement, and then bam: Your Medicare premiums soar because your income crossed the limit. Take a breath. There could be a solution.
-
Grilling Season and ETFs: There's More Than One Way to Cook Up a Portfolio
Exchange-traded funds come in a multitude of 'flavors' these days, from passive to active to factor-based. Their flexibility is what makes them so delicious.
-
You Don't Want It, But You Should Plan for It Anyway: An Expert Guide to Long-Term Care
Planning for long-term care is crucial to protect your independence, family and financial stability against unexpected health events and rising care costs not covered by standard insurance.
-
Japan Tariffs: 5 Things That Might Get More Expensive for You
President Donald Trump's trade agreement with Japan features a 15% reciprocal tariff for all imported products, which could impact the prices of these items when you go shopping.
-
Five Questions to Help Ensure a Happy, Secure Retirement
You need to drill down to what you really want out of retirement. Then you can get down to the business of crafting a financial plan to make it happen.
-
I'm a Financial Adviser: This Is How You Can Save for Big Goals Even if You Feel Like You're Barely Getting By
Learning good financial habits — building an emergency fund, paying down debt, saving consistently — gives you flexibility, options and a path to security.
-
How to Buy an Annuity Online (Without Regret)
You should never be rushed into buying an annuity. But now that they can be sold quickly and easily online, you need to be more alert than ever to pushy salesmanship. Here are four signs you're working online with a professional.
-
Dow Dives 542 Points on Soft Jobs Data: Stock Market Today
The last day of a busy week ends with the first greater-than-1% move in either direction in more than a month.