Below is a chart that shows the historic returns, adjusted for inflation, for the UK market for the last 200 years. It speaks for itself. It looks like a bell curve which shows the highest probable return for the stock market is -2% to +4%. If your 401k is long heavily in stocks based on common wisdom of this age, you may be betting that the 1 in 15 chance on the very right edge of the graph will happen again.
If you understand the current investment environment, it helps you to make informed decisions which will protect your wealth and increase your market returns, and perhaps avoid major disasters along the way.
Investing in the Stock Market
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Here is Prechter talking about the current crash (2008-2009-2010-2011 and perhaps 2012 according to Kontradiev Cycle) and closing his initial short position:
Note that Prechter was bullish from early March to August 2009 and in August he recommended adding short positions. By December 2009, he was 200% short. You can subscribe to Prechter’s market forecasting service here: