Introduction

Paradigm Lost

The greatest bull market in history was a glorious thing. When the bull finally keeled over from exhaustion at the end of 1999, it ended a 20-year period in which the S&P 500® Index saw an annual average return of 18.5%.1 Encompassed within that period were 5 consecutive years of 20% plus returns.2 The impact of that 5-year period on the psyches, not just the portfolios, of investors shouldn’t be underestimated.

Picture Herb, a hypothetical ultraconservative investor, who years or decades earlier had sworn off of equity investments, which ...

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