You’ve got to love the ignorance of those who say “best time to buy ever” now that the markets are in bear territory. You would think they would have learned from the mistakes of those who bought the NASDAQ all the way to the bottom from January 2000 to December 2002. For 24 months there was a constant parade of “tech stocks are cheap! Buy, buy, buy!” Then they lost their ass.
Some people are just not capable of learning.
While I’m not defending their mentality, I think I understand it a bit.
Too many investors (professional and retail) that came of age during the first term of Ronaldus Magnus have seen very little in the way of market behavior other than a secular bull market. Sure, there were corrections, and within a five year timeframe, they were handsomely rewarded for buying the dips.
This is different. We’re now back to the early 1970’s here. While I was just a kid myself back then, I’ve been going back to review that period of history very carefully and here’s what I have to tell investors:
The market went up during the 60’s. Then it came down hard during the Arab oil embargo. Then it went up again. And down again. And when Reagan came into office, unless you were a short-term, trade-the-swings sort of guy (which was VERY difficult back then, because we’re talking back in the days when your broker would clip you for a percentage on every trade, so if you wanted to really trade, you had to go to the market itself - ie, be AT the market site or have a seat on the exchange), you were basically flat from ‘73 to ‘80. Seven years of almost no long-term gains for the “buy and hold” investor.
Oh, and inflation eating your guts the entire time.
Oil prices started going up in ‘73. They didn’t stop going up until about 1981 to 1982.
People like to point to the Reagan tax cuts as being what ignited the secular bull market of the 80’s. Well, another factor was oil dropping from very high levels (for that day) down to very moderate levels for a very long time.
The truism is this: whenever oil has spiked upwards by more than 100%, really poor economic times have followed, sometimes lasting a decade, and the markets just chopped around up/down during those times.
Those of us on FR who have a clue about this history need to start teaching the young whelps about it, because I think history is about to repeat itself here, nice and hard. People who say “this is a great time to buy” are just whistling a merry tune while they’re walking past a whole lot of open graves....