YOUR PORTFOLIO
Boom and bust
26
Sir John Templeton once claimed that bull markets are “ born on pessimism , grow on scepticism , mature on optimism and die on euphoria ”, and with this in mind , it seems obvious that the winner of one bull run tends not to lead the next . While the move from euphoria to panic can be relatively sudden when the bubble bursts , the transition to outright pessimism takes much longer . But while the move from euphoria to pessimism is a gradual one , it seems relatively instantaneous compared with the length of time you need to wait to get from pessimism back to optimism , never mind euphoria .
– Number of years a UK investor who bought into Japan at its 1989 peak had to wait to break even
Yet this message doesn ’ t seem to have got through to investors : IA North America was the most popular sector in January , even though the tailwinds that caused it to surge in the 2010s and early 2020s have already begun to dissipate . As a result , over the next several pages we look back at the assets that led the market in each of the past five decades , then find out what happened to them when the good times came to an end .
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