
The
Road
More
Traveled
1195
miss every bear market.
Tru
e passive investors rigidly remam
invested in good times and bad, no matter what! And they over-
whelmingly beat those who time markets. To time markets
you really must know what you're doing and precious few do.
That'
s really hard.
One
warning: Corrections are different from bear markets.
They
are short, sharp shocks
-big,
sudden drops designed to scare
the pants off you.
They
can happen once or twice a year.
Don
't be
fooled. Remain invested and it will be over in a few months. Real
bear markets start slow and calm. People are optimistic after the
peak. Anyone pessimistic then is seen as nuts . Stocks drop a little
month-to-month,
but
nothing dramatic. Meanwhile, fundamen-
tals unravel and few notice. Bear markets don't start violently
-not
even in
1929-if
measured correctly. (See my 1987 book, revised in
2007, The Wall Street Waltz , on this.)
BONDS
ARE
RISKIER
THAN
STOCKS
.
SERIOUSLY
But wait! Can't stocks be down huge? Isn't it better to give up some
return for a sleep-at-night factor?
No
. Remember, this is The Ten
Roads to Riches,
not
The N ine Roadsto Ri
ches
and One Road to a Comfy
Night's Sleep.
In the long-term, stocks aren 't risky. In the short-
term, they're volatile, which scares people . Ignore the caveman in
you wanting to hide from scary things. Investors fail with long-
term returns because they can't get this in their bones:
The
near term
doesn't matter
-hard ...