I stumbled upon a presentation floating around on the internet which looks at the past 30 years of Time Magazine covers as they relate to the stock markets. Essentially, one theme is that once the market meltdowns make the front page it’s not a bad time to get back into the equity markets – such is the nature of investor and media psychology. The presentation notes the stock market index level at time of the magazine cover appearance and then shows the subsequent 10 year returns following that.
To be clear, this is not a recommendation to buy more equities, just food for thought.
I’m not entirely sure where credit goes, or if the presentation is not meant to be shared (although I think it is). From the document properties the stated author is Eric Harrison, although this could just be the person who converted it into a PDF file.
If anyone knows who put this together, please let me know so that I may give him/her credit (or take it down if they request.) In the meantime, click here to download the file (PDF document).
Wholefully agreed!
Although the media does a good job of depicting the current economic situation, I think its how investors react to this information which determines how well then do financially.
I wonder what the authors wrote as recommendations for investors?
Smart investors would take this information and see it as a tremendous buying oppturnity (so long as they have a long enough investment timeframe).
Who watches the watchmen? (sorry, I am geeking out). The media has been pretty irresponsible during this whole down-turn chasing the wrong stories and pouring fuel to the wrong fires.