NW-Bound
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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- Jul 3, 2008
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What are you doing to celebrate the Longest Bull Market in History?
Longest Bull, Ever? | Meb Faber Research - Stock Market and Investing Blog
The author shows the period of 1982-2000 as 4 pieces: 1982-1987, 1987-1990, 1990-1998, 1998-2000. This is correct using the standard definition of a 20% market drop to define a bear market to punctuate the above 17-year period.
During this 17-year period, I was not following the market much, and never did any change in AA of my 401k contributions, nor make any rebalancing. Hence, I look back at the 1982-2000 period as one long bull market. I still kick myself for not paying attention, else I would have more money.
Anyway, if the market drops 10% now for a correction, do I dare plow all of my 30% cash into it? When the market recovers, that will give me just 3.3% gain as computed over the entire portfolio. For a bear market of 20% drop, at full recovery I would have a 7.5% gain.
When you sit down and compute it, the gain is not as much as you would think. How many people have a 30% cash AA, and the courage to drop it all into a bear market and the perfect timing to choose the right point, in order to get a 7.5% gain?
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