The UNTHINKABLE is About to Happen to Stocks (Emergency Update)

Tom Nash•Jul 22, 2026

Summary

Tom addresses recent warnings from billionaire Jeremy Grantham regarding a potential 70% crash in the S&P 500. Tom highlights the contradiction in such warnings by pointing out that Grantham's own firm, GMO, remains heavily invested in US mega-cap stocks like Microsoft, Apple, and Google. Tom provides historical context, showing that while major crashes occur, the stock market has a 100% success rate of being positive over any 20-year period. Tom emphasizes that more money is lost waiting for corrections than in the corrections themselves.

Tom proposes a systematic approach called the 'DCA Double Down' strategy to manage volatility. This involves maintaining a cash reserve in a money market account and doubling investment amounts when the S&P 500 drops 10% or individual stocks drop 20% below their 52-week highs. Tom also recommends a strict 'trim schedule' to lock in profits: trimming 10% at a 50% gain, 20% at a 100% gain, and 30% at a 150% gain. Tom concludes that investors should focus on preparation through a rules-based system rather than trying to predict the next market top or bottom.

S&P 500 (SPY): Tom recommends holding the S&P 500 for the long term, noting that 95% of all 10-year periods and 100% of 20-year periods have yielded positive returns. Tom argues that 10% corrections happen roughly once per year and should be viewed as buying opportunities rather than reasons to exit the market. Tom suggests buying more aggressively whenever the index falls 10% below its 52-week high.

Microsoft (MSFT): Tom notes that Microsoft is a top holding in both successful Vanguard portfolios and the firm of market bears like Jeremy Grantham. Tom views Microsoft as a core US mega-cap stock that investors should hold through volatility rather than panic selling. Tom includes Microsoft in the category of companies where a 20% dip should trigger a 'Double Down' buying action according to Tom's strategy.

Apple (AAPL): Tom mentions Apple as a primary example of a high-quality US company that remains a top-five holding for institutional investors despite public warnings of an AI bubble. Tom argues that successful investors are 'US-centric' and that Apple represents the type of dominant technology stock that drives long-term bull market performance. Tom suggests following a systematic trim schedule for such stocks to manage risk without exiting the position entirely.

Summary

Mentioned Stocks