Hi Guys,
Extreme events always attract much attention because they are extreme, but also because they are rare. Considering the odds, these extreme events should not dominate investment decision making. Here is a recent article that makes that exact point:
http://www.collaborativefund.com/blog/the-most-dangerous-kind-of-learning/One benefit of knowing historical results helps in deciding what size of cash is needed to survive a down equity marketplace. Of course things change, but that historical database is a great point of departure in any future projections. Here is a Link to a summary that you will find useful:
http://awealthofcommonsense.com/2015/11/playing-the-probabilities/The opening Table is a terrific summary. Indeed, "Playing the Probabilities" is a winning strategy. Enjoy!
ADDED THOUGHT: Sorry for my long delay in completing this submittal. I was in a rush to be on time for my Saturday morning tennis game. What I failed to say was that these data clearly demonstrate the wisdom of the old investment saw that " it's the time in the markets that is significant and not market timing". Note how the probabilities of positive market rewards increase from a little better than 50/50 odds on a daily basis to over 90 % if the acceptable holding period is near the 10-year level. Time is an investors true ally. Please plan to take advantage of it.
Best Regards
