Thursday, November 20, 2008

April 14, 1997

... That's the last time the S&P 500 index closed lower (743) than today's close of 752.
  • The dot-com bubble and the crash that followed played out entirely at higher prices than today.
  • The 2002-2007 bull market has been completely erased.
  • The infamous market low on October 9, 2002 would be an improvement now.
If eleven-and-a-half years with no capital gains doesn't shake one's confidence in buy-and-hold investing, then nothing will.

5 comments:

RO said...

For someone who has little insight into "the market" (like me), "buy'n'hold" is still relevant..but now I guess in at least a 10-20y+ timeframe (i.e retirement account with monthly investments to buy at both low and high).

My other excellent choice is ofcourse watching this blog ;)

wooderson316 said...

Buy and hold is definitely relevant. It's just not the "best" approach for everyone. It is most certainly the best approach for some people.

Anonymous said...

I dumped most of my mutual fund holdings a while back. This market could put to rest the conventional wisdom of putting $100/month into mutual funds and holding it for 20+ years. That might have been wise in the bull market, but when you look at the long-term double top in the S&P 500, I think the mutual fund industry's mantra of "stay the course and don't panic" is going to be sadly mistaken. Thanks for doing this blog! I really enjoy it.

Anonymous said...

Jody,

Yesterday I heard mention of a short-selling ban being reinstated on Monday. Have you run across any news of this? What would be the potential impact on BEARX?

Thanks again for your vigilance in this market.

Ken

Jody said...

I haven't heard of any resumption of the short selling ban. It would surprise me because the fraction of shares sold short has been plummeting over the past few months to multi-year lows. So, if short selling was ever a real "problem," it's much less of a problem now.