Tom Stevenson Takes Heart

In his Daily Telegraph column entitled, "Just Because We've Lost a Decade Doesn't Mean We Should Lose Heart," Tom Stevenson writes:

Investors considering whether today's stock market represents an attractive long-term buying opportunity face a similar dilemma. As we are constantly told, past performance is no guide to the future, and in the short term it plainly is not. But over the longer term, past performance is apparently a very good guide indeed. Investment feast invariably follows investment famine and betting that way makes instinctive sense.

Further down he wonders whether we're headed for a long awful patch like Japan suffered:

I think we are not for two reasons. First, because the policy response to the property and banking crisis has been so different from the way in which the Japanese authorities mishandled the bursting of their own bubble through the 1990s. The lessons learnt make a repeat unlikely. Second, because my analysis of the past 108 years suggests that betting against a decent performance from here is a very long shot indeed.