{"id":6125,"date":"2013-03-27T08:06:09","date_gmt":"2013-03-27T15:06:09","guid":{"rendered":"http:\/\/www.marketriders.com\/investing\/?p=6125"},"modified":"2016-12-21T07:30:41","modified_gmt":"2016-12-21T15:30:41","slug":"save-your-doomsday-investing-reads-for-the-beach","status":"publish","type":"post","link":"https:\/\/www.marketriders.com\/investing\/save-your-doomsday-investing-reads-for-the-beach\/","title":{"rendered":"Save Your Doomsday Investing Reads for the Beach"},"content":{"rendered":"

One of the most amusing aspects of the doomsday investing and the financial publishing business is how completely and totally sure the “doomer” prognosticators\u00a0are, all the time, without fail.<\/p>\n

It would be nice to have their optimism, even if it’s optimism that the world is near its end. The latest round of market predictions, for instance, trends toward the idea that a market crash must be imminent.<\/p>\n

Not surprising. The market just set a new high. But you wonder how many of these doomsday investing\u00a0folks are\u00a0truly short the entire market \u2014 or just talking about it<\/a>.<\/p>\n

\"doomsday<\/a><\/p>\n

Behind the immediate correction calls you also have the unending alarms of generalized doom. There are plenty of doomsday investing\u00a0folks who have built cottage industries around predicting total economic collapse.<\/p>\n

Unnerving\u00a0reading, for sure, but how realistic is the doomer view?<\/p>\n

Consider some of the things they’ve said in the past, like\u00a0we’ll see Dow 40,000 by 2008<\/a>, the year the Dow hit…8,046 on its way down to 6,626 soon after.<\/p>\n

That\u00a0China is the future of the world economy<\/a>, unless its\u00a0rapidly aging population<\/a>\u00a0means it’s not.<\/p>\n

That\u00a0gold will go to $5,000<\/a>\u00a0unless, of course,\u00a0on second thought maybe it’s going lower<\/a>.<\/p>\n

It wouldn’t be hard to fill up the rest of this page with embarrassing doomsday investing\u00a0flubs from otherwise respected names in the financial media commentary class.<\/p>\n

The more productive way to approach the subject, however, is to consider the problem of long-range thinking in short-range matters.<\/p>\n

It’s easy \u2014 extremely easy \u2014 to gather data over decades, dump it into a spreadsheet program and point out doomsday investing patterns. Waves and cycles, even supercycles and “foolproof” predictors of war and famine.<\/p>\n

Serious investors should take doomsday investing\u00a0for what it is: A weird hobby at best and a dangerous source of misinformation at worst.<\/p>\n

Consider how long you will be an investor. Twenty years? Maybe 30? You simply won’t be investing over the span of a half-century.<\/p>\n

Yet taking an all-in bet on a far-out doomsday investing\u00a0prediction\u00a0can lead you into immediate financial calamity<\/a>. An investment that logically should crash and burn could instead surprise with years of outperformance. A “sure thing” could flop badly, turning your dollars into pennies overnight.<\/p>\n

It is, perhaps, an insight so commonsensical that one shouldn’t mention it, but\u00a0passive investing<\/a>\u00a0works precisely because it does not require you to be “right” about anything. It only requires you to be invested adequately for the level of risk you can assume over time.<\/p>\n

Sensible doomsday investing<\/h2>\n

Owning a truly diversified portfolio might put you out of your personal comfort zone from time to time. You might hate gold but own it anyway. You might fear stocks (or bonds) but own them anyway.<\/p>\n

You might find yourself buying into investment types that only recently seemed to be eating the economy alive (real estate) or having a horrible year (commodities) or are suspect on the face of it (emerging market debt).<\/p>\n

Yet the\u00a0serious retirement investor should own them<\/a>\u00a0in some measure \u2014 and save the doomsday investing\u00a0reading for the beach.<\/p>\n","protected":false},"excerpt":{"rendered":"

One of the most amusing aspects of the doomsday investing and the financial publishing business is how completely and totally sure the “doomer” prognosticators\u00a0are, all the time, without fail. 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