This article was originally published on ETFTrends.com.
By Preston McSwain via Iris.xyz
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Stocks Are Risky – This is Not the New Normal, Just Normal
“The New Normal”, first coined in September 2009 to describe market changes “that may forever change the world”, has become a favorite on Wall Street and in the financial press.
It’s quite catchy. Someone should have trademarked it. Beyond its clickbait appeal, though, was it just another example of a haloed Wall Street prognosticator setting unrealistic market expectations?
New Normal circa 2009 suggested that the world was about to enter a prolonged period of lower stock market returns. Instead, as has happened before, risk assets, such as stocks, have provided long-term investors with handsome returns.
Yes, the prognostications of 2009 were worth little to no weight. Lest you think this characterization is a little too critical, the evidence behind this statement can be found in our recent posts titled “Why I Don’t Make Forecasts” and “Groundhog Day” (click the links to read). The pieces aren’t long and contain data showing why I’ve never heard a seasoned professional deny – in private – that market predictions are never in doubt, but often wrong.
More to the point of the title of this piece, though, the New Normal didn’t bring any new – just the normal.
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