12. Market Mythbusters

Unlike the television show “Mythbusters” (one of my favorites), I’m sorry to say that we won’t be blowing things up in this chapter. Darn budget constraints! But I would like to explode some of the major myths that keep people out of the stock market at exactly the wrong time.

MYTHBUSTER THOUGHT NO. 1: The four most dangerous words in finance are “this time it’s different!”

It’s never different. It’s just capitalism, and it’s a naturally cyclical economic system. (Now, the seven most dangerous words are probably “Hey, we’re getting the band back together!”)

You tend to hear these proclamations when stocks are selling at either insanely bullish or insanely bearish valuations. In the financial meltdown of 2008–2009, fear ...

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