Morningstar's John Rekenthaler
writes of a Great National Funk, not a James Brown-inspired funk, but the kind of funk that comes from market extremes changing investor behavior.
After the 2008 crash, a certain idea became widespread, namely that buy-and-hold investing was dead, Rekenthaler writes. The idea was driven by anxiety and fear, boosted by personal finance writers, money managers and investment strategists Rekenthaler says.
] Bill Gross'
prediction of a new normal, that the U.S. economy would simply move along at slow pace rather than rev up its engine post-recession, his other prediction that stocks would would have a lower rate of return in the future, did not pan out, Rekenthaler writes.
Surprise, surprise, people have now realized that making stock decisions based on a bond economist's fortune telling was not a wise decision, Rekenthaler says, as it left investors who ditched stocks after 2008 lost near the amount of their original investment in opportunity cost.
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