Our reactions to events in the past 25 years have been overblown:
The dot-com stock market crash
The 9/11 attacks
The subprime mortgage crisis
Everything we worry about doesn’t turn out to be as bad as expected, and life in the US goes on pretty much as before. The subprime mortgage crisis was the worst, and caused a lot of people a lot of pain, but the nation as a whole managed to recover.
I predict that a year from now, we’ll be worried about something else. It is very unreasonable to expect history to stop, and no new problems to come along. We seem to be better than we think at dealing with them.
The sub prime mortgage crisis wasn’t overblown. Most don’t realize how close we were to a financial meltdown. Think getting .75 a $1 on your money market fund and what type of chaos that would bring. We were right at that point. Hopefully lessons were learned, but I have my doubts. I’ve been in the investment industry 33 years and 08 was terrifying know how the sausage was made.