Mark Hulbert at Marketwatch summarizes some of the biggest busts in recent history:
1) The Nasdaq Composite is still more than 40% below its all-time high set in March 2000. That was 12 years ago.
2) It took the Dow Jones Industrial Average 25 years to surpass its 1929 pre-crash level.
3) After reaching 1,000 in January 1966, the Dow Jones Industrial Average wouldn’t see that level again until October 1982. That is a 16-year period with no gain.
4) The Nikkei Stock Average peaked at the 40,000 level in 1989 and despite the passage of more than two decades, it languishes today at only a quarter of its 1989 peak.
Of course, it would be a huge mistake to only focus on the negative. Global markets have also offered tremendous opportunities to build wealth over the past century.
However, any investor who adopted a buy-and-hold strategy that consisted of allocating a large portion of their portfolio to any of the above markets before their peaks suffered financial disaster. I believe that this is one of the biggest reasons that Global Tactical Asset Allocation has gained such traction. Investors are demanding the ability to adapt. With the dramatic growth of the ETF industry, retail investors can easily access global equity, fixed income, and real estate markets, and a broad range of currencies and commodities. Having the ability to diminish exposure to asset classes that are in extended bear markets (and increase exposure to those in extended bull markets) offers much greater peace of mind to investors.
Click here to view a video on our “go-anywhere” strategy—Global Macro.
Click here and here for disclosures. Past performance is no guarantee of future returns.
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