Mat,
Actually, '73-'74 and '81-'82 are included in the whole 1966-1982 mess.
The Dow first approached 1000 in '66 and bottomed at 770 in August of 1982.
Now how do you think someone 16 years from retirement would feel in 2013 if they were down overall from today? I think they might have some unkind words for the broker/mutual fund industry that is so busily showing them the Ibbottson charts proving stocks never go down.
I once asked a co-worker who liked to use those charts, from what date he started the sequence, showing this "given". He just smiled and said "wherever it best proves my point".
1929-1954 showed the same situation, where investors had long term losses, as everyone knows. But most people don't realize that 1906-1921 was a third time in just this century where the same thing happened. We have routinely had long periods where it's easier to lose, than gain, in the stock market.
There was a money manager on CNBC this week named O'Shaughnessy who quoted a study that showed "if you only missed the best 10 days this last 50 years(forget exact amount of time, doesn't matter), you would have missed 90% of that periods total upmove. Proving buy and hold is the only strategy that works. What people like that forget to mention, is that another study showed the same thing on the downside. If you only missed the worst 10 days, etc., etc. All in all, it means nothing. But it's used by the MF industry to snare commissions.
Proving, I guess, that as my ex co-worker was doing, it's all in how you measure. You can prove anything!
I still think it's best to be cautious when markets are this over-valued, and fully invested when they're under-valued. Just common sense.
Dwight |
