Broker Check

Harry Truman's Long Quest

February 24, 2021

A frustrated president Harry Truman once opined that what he was looking for was a one armed economist. The reason being: when he asked for an economic forecast he always received as an answer, "on the one hand... then again, on the other...!"

Nobel Laureate and renowned Yale professor, Robert Shiller recently gave a talk where he perfectly illustrated Truman's frustration that investors always seem to be confronted with. This is a very good reason why investors should have a well thought out lifelong investing plan that takes into account various contingencies so that one does not have to always confront a decision as to "what should I do now?"

From Schiller's remarks:

“…U.S. stocks have the highest CAPE ratio (a Shiller formula for measuring equity risk) of any global equity market, but they are still the place to invest. But stocks are indeed risky…

This is a risky time for investing in the stock market, he said. But there is a good chance the market will get on the same path as it was before the pandemic…

But it could go the other way, he added, eroding the wealth of equity investors….”

One the one hand… then again, on the other!

The more things change, the more they remain the same.

Copyright (c) 2021

Frederick C Taylor

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