Current market conditions and misplaced investor pessimism make this topic worth revisiting. Continued revisits will likely prove valuable as global events play out. The value of hindsight is that it reveals the likely basis of significant market shifts, the importance of which were not knowable at the time. Experience teaches that the most useful hindsight requires a lookback often encompassing decades.
Three misperceptions that are key drivers of market psychology apply to the current topic.
- Central Bankers control interest rates - not true
- Emerging companies and emerging countries have the best returns - not true