Investor complacency is rampant. Advisors and managers who peddle harmful, self-interested, financial recommendations are hard at fresh marketing initiatives. The reckless are being foolishly revered and the business media are relentlessly helping to spin the web of folly. Remarkably, near a third cycle peak, 13 years into an ongoing secular bear market, most people remain immersed in a child-like understanding of market prices. Meanwhile capital risk to real people has doubtless not been this high since 2007.
Today the greatest risk is in acting as if the 50% market declines of 2001-03 and 2008-09 were unfortunate accidents or anomalies now behind us. The promise of fresh catastrophe lies ahead, as most still lack meaningful risk management strategies to protect capital from the ravages of the next cyclical bear market.
Those whose recommendations for constant equity allocations have devastated capital repeatedly since 2000 have been greatly encouraged by recent speculative advances. Their next victims follow hopeful and unsuspecting. Many will be harmed through ignorance. Many others though, have learned these lessons already. They should know better, but will succumb once more through various strains of impatience, ego, willful blindness and lack of personal discipline.