Let’s say you just came into a large chunk of cash and have a 5+ year time horizon… Assuming your wits are about ya – i.e., you know you should buy equities with a considerable portion of your fortune – what would you wish for, in terms of global sentiment on this day you are to establish your portfolio? Would you want a world brimming with optimism about the future, or would you prefer doom and gloom?

You’d, wits intact, of course choose the latter (i.e., doom/gloom = cheaper stocks)…

So then, if you’re an investor with an established, globally diverse portfolio, with a 5+ year time horizon, irregardless of recent results –

same question… same answer…

Here’s another way to look at it… You’re either of the two above, and you’re considering the previous 10 year market results… Would you hope to follow a decade of huge gains or one of flat to slightly negative results (just looking at stock indices)?

Again, wits withstanding, you’d go with the latter – simply because you’d presume the prospects for the next say 5 to 10 years would be better coming off of a (relatively) sour period, as opposed to following a raging bull market… Of course that’s assuming you’ve overcome the otherwise ubiquitous (among consumers) whatever’s-happening-now-will-happen-forever attitude…

My point; the best periods tend to follow the worst (not a near-term prediction mind you) – or – in the immortal words of Sir John Templeton;

“Bull Markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria”…

Now if you’re thinking Japan – the land of the long recession, of policy mishaps, of zero interest rates as far as the eye can see – to you I say; read It’s Not All About the U.S. Economy …

Think global my friend…