Jim, Your not going to get any big argument from me.
I've studied the Depression Children at an interesting level; I do there tax returns. I'm a lone ranger and haven't expanded the practice in years (only so many hours in a day). Thus, my average client has been with me for about 12 years. [As an aside, I had dinner with one a couple of weeks ago that I haven't met face-to-face since 1979.]
Since most of them are much older than I am, they have been an interesting group to observe. They are generally upper middle class [necessary to afford my fees <g>]. They have worked hard, they have saved and they have been rewarded by the American Dream.
But, a funny thing happened along the way. Just about the time most of them started seriously saving (kids gone, etc), the 73-74 bear market hit. They saw a lot of their friends seriously hurt, and it totally soured them on the stock market. Despite the fact that they will never touch the principal (about as long-term as you can get), and are, in fact, adding to their savings on a regular basis, I could not convince many of them to put a dime in the equity markets. [As another aside, I have given up trying to explain to them that there is a reason that hearses don't have luggage racks.]
Until we get a sustained bear market, the baby-boomers are programmed to buy the dips. It would be silly of us to ignore this reality. Yes, it will one day end and it will end badly. Until then, make hay while the sun shines.
Berney |
