MarketWatch — The stock market remains on solid footing and the likelihood of a crash is minimal. Many believe that the October crash was caused by an overabundance of selling by program traders. At the time, the idea of portfolio insurance — attempting to hedge a portfolio of equities against the risk of decline by short-selling stock index futures — was very much in vogue, and the new technology of the time made it easy to make large trades automatically on a scale that had not been possible in the past.

Many believe that high-frequency traders could — like the program traders of the s — cause serious new risks to the stability of the financial system. Prepare yourself for another like market crash.

Had an investor waded into the market in the aftermath of the crash, five years later he would have seen a portfolio annual gain of Ten years later his portfolio would have gained Even investors unlucky enough to have put money into the market right before the crash would still have done well over the long term. The key is to be able to stick with your investments despite short-term setbacks. David Rosenberg on how to protect your money from a shaky stock market.

Indeed, using market plunges as a buying opportunity has worked extraordinarily well over the last years. Another technique is to look at the rolling year returns for U. If the inflation-adjusted annual return over the previous 10 years is worse than I have studied the worst year results for the U. Since , the 50 worst inflation-adjusted returns saw an average year annual decline of 4. Yet, had an investor put money to work in equities immediately following these 50 worst year declines, he would have averaged a five-year gain of How stocks have fared after the market's 50 worst year periods.

The decade ending February , for example, saw an annual, inflation-adjusted loss of 5. So far, the market has delivered a At the time, few were willing to take the guidance of history and get back into stocks, yet between the time the commentary was published and now, the market has nearly doubled.

Secrets to Making Money During a Stock Market Crash

And I expect stocks to do better than virtually all of the alternatives over the coming five- and 10 years. O'Shaugnessy's article on why it's time to buy stocks. So, should the high-frequency traders cause a crash similar to what we saw in , all of the historical evidence says that you should use the opportunity to load up on stocks.

MarketWatch revisits the stock market crash all this week. What do you think? Click here to take our poll.

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