Smedleyb,
I think the optimism is great, and I hope you are right! But do you know of any evidence that some people can do better than chance at predicting the market? Or I guess more accurately, that we can identify those people/factors ahead of time?
Ben
Βen,
In my experience, investing involves two variables: price and time.
e.g., gold was hot in the 70's, peaked in 1980, and then did nothing for years. Yet during the late 90's, early 2000, you had all the time in world to scoop up gold in the $200 an oz. range. Funny because all that was desired then was stocks, especially tech and financials, which have performed horribly since, even though gold is up 9 fold during the same time-period!
Along this time-axis, you can plot gold's rise in various stages: skepticism -- nobody believes it's worth anything, hasn't moved in years, etc.; acceptance -- the idea that maybe there is something of value after all, to much money printing; frenzy -- sell the kids on Ebay to buy as much yellow metal as possible!
This is just a rough schema of the emotions speculators/investors go through. It works on the back-side or downside of the speculative frenzy as well, the process whereby that asset class goes from loved to hated. It bottoms not just when it finds a certain price on the downside, but also after the passage of time has caused it to become under-owned and unloved.
On the flip-side, beware of what is obvious today.
Thus, when a particular asset class goes sideways/down for a long period of time, when people have given up hope that their "investments" will ever go up again, it starts to peak my interest as a speculator/investor (I think we're all a little of both). It says to me much of the risk has been priced out of that asset class, and that it's time to start "selectively" accumulating.
But as far as stocks go, with the S&P 100% off it's lows because of supercharged government spending and rampant liquidity injections by the Feb, I say build up a pile of cash and wait for the "right" time to put that stash to work (in addition to continuing to invest month by month in a general index fund).
Again, just one humble mustachian's opinion in the effort to maximize returns.