In 2007, just before the financial crisis, more than 90% of individual investors thought stocks were the best investment, according to survey data collected by Yale’s Robert Shiller. By 2011, the number had fallen to just over 70%, the lowest point since the survey started in the 1990s. By then, the economic recovery was well underway and the current bull market had years to run.
Investment manager Gregg Fisher, founder of Gerstein Fisher, made this slightly tongue-in-cheek model of how slow investor sentiment is to register what’s actually happening in the economy.
The upshot: If you know that recent market experience is likely to color how you see your investments, you can decide not to try to time the market’s twists and turns. Find a strategy that makes sense for you and resolve to stick with it, except for rebalancing your portfolio once a year or so.