Market Upside Down: How to Invest Profitably in a Shrinking Economy

7. Investing in Markets Upside Down

The roaring equity prices of the 1980s and 1990s have conditioned our expectations so much, it has been difficult to think of the stock market as anything but a perpetual bull run, with the good times always coming back after any declines.

For any of us who might have thought otherwise, our financial advisors would show us the double-digit returns of the preceding three and five years, and our doubts about the market would be shaken, at least a little bit. Neighbors (and, in my case, on a number of occasions, the airport limo drivers and the carpenters and the masons who did work on my house) would also be glad to help point us toward the wonderful ways of stocks. We would feel like maybe we were too conservative ...