The price of fear

“When the markets are roiling, as they are now, fear is pitched all day, every day, and human nature buys it. And pays a premium. A very big premium.”

– R.P. Seawright, encouraging readers of his blog, Above the Market, to stay the course. He said while a big drawdown is “much more likely” today than five years ago, the probabilities still favor long-term investors. Read more

It’s tough to go long

“Because we think poor short-term outcomes means that something is wrong.”

– One of 50 reasons why many investors are so bad at thinking long-term, according to a 12/18/18 post by Joe Wiggins, author of the Behavioural Investment blog. Read the other 49 reasons

Where the stock values are

“If there’s value in stocks, it’s in foreign markets. If the S&P 500 were to fall 25%, it would merely be at its median valuation over the past 30 years, based on a variety of long-term valuation metrics. But foreign markets such as those in the MSCI EAFE index could gain 10% just to get back to median valuations.”

– Doug Ramsey, Chief Investment Officer of Leuthold Group, quoted in Barron’s on 12/3/18.

The 50/50 investor

“Half the time I wonder why I have so much in stocks; the other half, I wonder why I have so little.”

– Vanguard founder Jack Bogle, after describing his own asset allocation as “50% bonds...and 50% stocks” in an interview published by ThinkAdvisor on 11/27/18. Read more