Those with investment horizons of 10 or 20 years should be ever ready to embrace out-of-favour asset classes.
Time and again, the market has handsomely rewarded those willing to bear equity risk in uncertain times. Extreme pessimism - which leads to swings from the equilibrium - compresses a proverbial spring that will eventually bounce back into equilibrium. The more share price falls, the more return it promises a prospective buyer.
Stocks - short of the company going bankrupt - will very often produce their promised returns eventually; it is the timing that will elude us. So for those with time on their side, they have nothing to lose. In short, having an explicit investment plan supports discipline and helps ensure that an investor is not swayed by panic or overconfidence.
If one is investing for financial independence 20 or 30 years down the road, opportunities that came with Sept 11's after-shocks, the Asian financial crisis, or the recent Lehman crash, are not to be missed.
Ref: Show Me the Money by Teh Hooi Ling
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