In Investing, It’s When You Start and When You Finish (2011)
It's interesting to note that at the beginning of the best periods to invest (the big green regions on the graph, like 1942-1960s or 1980s-2000), the stock market was often not just low in terms of broad valuation. It was just "empty". It had typically gone through many years of very little participation, little activity and low liquidity.E.g. in 1980 the (Belgian) stock market was pretty much comatose. The typical stock owners were wealthy families, often holding their family fortune as a large stake in a single company. To most non-financial people in 1980, owning public common stock would have been something from a bygone era. They didn't consider it an option.Rather, people in 1980 were standing in line to buy gold coins. People then feared that Volcker's dramatic rate hikes would cause severe problems. When the stock market sprang to life in early and mid 80s, back offices were often not able to keep pace and doing transactions could be cumbersome.Compare this with 2016, where central bankers are walking on egg shells to hike rates with as little as 0.25%. Stocks and bonds are more expensive than ever. Yet almost everybody I know has a trading account. Regular people can trade advanced derivatives with minimal hassle. Every time I visit a bank, I see desks and booths filled with people getting talked into investing their savings into various kinds of "high" yielding constructions. Because "TINA".Feels to me like the worst time to invest. 36 years of buy-the-dip reinforcement learning. But then again I've felt like this for years.