Over the long term, the majority of investors surveyed were dead wrong.
Since 1987, the weekly AAII sentiment survey had the following average reading:
In that period, the S&P 500 has gone up 498%—a compound average growth rate of 7%, not including dividends—pretty much in line with historical averages.
Think about that for a minute.
Over a quarter of a century, despite some big moves up and down, stocks performed as they historically always have, averaging about 7% gains per year. And while stocks went along their usual course higher, at any given time, the majority of investors were, on average, not bullish.
Nearly two-thirds of investors, in fact, expected the market to go down or remain flat.
How is that possible? Have we become a world of glass-half-empty pessimists?
The news media certainly doesn't help.
And, of course, the financial media needs to scare you in order to keep you hooked so you know what and when to buy and sell.
It doesn't make sense to invest scared. Despite the occasional bubble or risky valuations, stocks still go up over the long term.
If you're a long-term investor, I hope you won't be part of the majority that is constantly afraid. That's no way to live. And it's no way to make money.
- See more at: http://www.hcplive.com/physicians-money-digest/investing/IU-Why-Are-So-Many-People-Wrong?utm_source=Informz&utm_medium=PMD&utm_campaign=PMD+5%2D14%2D14#sthash.tuiDlsW7.dpuf