According to AAII, investor sentiment is at its worst level since the association began tracking sentiment readings in 1987. 70% of investors are now bearish compared to the 1990 record of 67%. If you have a 10 year time horizon the odds are beginning to look very favorable for equity investors. Unlike the legions of investors who have proclaimed buy and hold dead, I actually believe it is more viable than ever right now (though that doesn’t make it my strategy of choice – all investors have different time horizons, risk parameters and goals).
Looking back at every point when the market returned less than 2.5% for 10 years, it then returned an average 13.3% for the next 10 years, with a range of 7.1% to 18.6%.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.