Sorry, Mom -- it appears that you gave birth to a moron. My recent article "A Market Crash is Coming" got me one heck of an earful from readers:
- "You're an idiot. Perhaps you shouldn't use sensationalistic terms like crash in your pseudo editorials to get people to read your drivel regarding investing in General Electric and Altria. Do us a favor and stick to writing about shoes and makeup." -- T. W.
- "I won't even begin to be taken in by your 'yellow journalism' title of your most recent article. Sensationalism does not have a place in a respectable author's writings. The fact that you stoop so low to get people's attention is indicative of your immaturity in this field." -- S. H.
- "Oh, I know, let's sell our portfolios in anticipation of the next big market crash. What the hell's wrong with you for printing this crap?" -- T. W.
Funny. I didn't suggest selling portfolios because of an impending crash. I thought I offered some useful advice, actually: looking for opportunities in crashes, remembering that despite crashes, the market's overall trend has been upward, and considering dividend payers and stop-loss orders as protection against falling markets. I cited Johnson & Johnson (NYSE:JNJ) as an example of a company that fared relatively well during a recent market downturn, and pointed out how some good companies, such as Cisco Systems (NASDAQ:CSCO), can take a long time to recover from falls. None of this advice seems very reckless or irresponsible to me.
What's going on?
As I pondered the passionate nature of these reader responses, it struck me that they actually were evidence of why my article was probably useful for many people. The problem with major market downturns is that they make many people more emotional and less rational, prompting them to panic-sell at just the wrong time. Apparently, even reading about market crashes can trigger this sort of knee-jerk reaction in some folks.
I'll readily concede that my title was at least a bit sensational. Still, I must also point out that a market crash is coming -- someday. It might be a week away, or 10 years away, but we shouldn't let ourselves be lulled into thinking it won't happen anytime soon. It's best to realize it can happen any time, and to be psychologically ready for it.
More perspective
If a crash does happen soon, you'd do well to remember the words of superinvestor Warren Buffett of Berkshire Hathaway (NYSE:BRK-A), who told shareholders in his annual letter in 1997: "Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."
Here's to long-term portfolio growth, through market upturns and downturns!
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Longtime Fool contributor Selena Maranjian owns shares of Berkshire Hathaway, General Electric, and Johnson & Johnson. Berkshire is a Motley Fool Inside Value pick, while J&J is an Income Investor selection. The Fool has a disclosure policy.
