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.
-
Could This Little Known Data Shift Hurt Your 2026 Social Security COLA?
The BLS has changed how it measures the inflationary data that determines whether Social Security benefits will get a Cost-of-Living Adjustment (COLA). Will it hurt your benefits?
-
Financial Pros Provide a Beginner's Guide to Building Wealth in 10 Years
Building wealth over 10 years requires understanding your current financial situation, budgeting effectively, eliminating high-interest debt and increasing both your income and financial literacy.
-
Financial Pros Provide a Beginner's Guide to Building Wealth in 10 Years
Building wealth over 10 years requires understanding your current financial situation, budgeting effectively, eliminating high-interest debt and increasing both your income and financial literacy.
-
Five Mistakes to Avoid in Your First Year of Retirement
Retirement brings the freedom to choose how to spend your money and time. But choices made in the initial rush of excitement could create problems in future.
-
I'm an Investing Expert: This Is How You Can Invest Like Warren Buffett
Buffett just invested $15 billion in oil and gas, and you can leverage the same strategy in your IRA to potentially generate 8% to 12% quarterly cash flow while taking advantage of tax benefits that are unavailable in any other investment class.
-
Integrity, Generosity and Wealth: A Faith-Based Approach to Business
Entrepreneurs who align their business and financial decisions with the biblical principles of integrity, generosity and helping others can realize impactful and fulfilling success.
-
How to Invest as the AI Industry Grows Up
Here’s where to find the winners as artificial intelligence transitions from an emerging technology to an adolescent one.
-
How Much Income Can You Get From an Annuity? An Annuities Expert Gets Specific
Here's a detailed look at income annuities and the factors that determine your payout now and in the future.
-
Your Paycheck Stops in Retirement, But Your Life Doesn't: An Expert Guide to Planning for a Confident Future
Social Security will replace only about 40% of your salary, on average. A solid financial plan will help you plug the gap so you can rest easy in retirement.
-
Are You Jeopardizing Your Future to Help Your Adult Kids? An Expert Guide for How to Not Do That
If your adult child needs financial help, of course you want to provide it, but crafting a plan that also protects your financial and emotional well-being is vital.