Can you sleep at night? Ken Fisher examines why for some reason, many investing professionals and pundits have a creepy fascination with what happens in your bedroom. Cooked into their recommendations is often the elusive "sleep at night" factor (which, believe it or not, is not a primary benchmark determinant — see Bunk 4
Many people just can’t stomach volatility, Ken Fisher explains, — wild wiggles make 'em crazy! Give them ulcers and keep them up at night. For those folks, Fisher asks that before we consider dooming them to what is likely a lifetime of lackluster returns, he would put a few hard questions to them.
Are You So Sure Stocks Are the Problem?
First, Ken Fisher asks, do you know bonds can and do have down years? (You do if you read Bunk 1!)
Second, Ken Fisher clarifies are you so sure you hate wild wiggles? Ken Fisher explains that folks think of downside volatility as bad and upside volatility as not volatility at all. But it is all volatility. You like the wild wiggles when they are up wiggles. It is amazing how many folks claiming they hate stocks at the end of a bear market — don’t want to hold them ever again — change their tune radically after a couple or three or six years of a bull market and come back to stocks (sometimes just in time to get hammered again). Suddenly, they can't get enough "risk" — want to load up on it.
Read more details of BUNK 2, including other questions Ken Fisher puts to people who claim they just can’t stomach volatility in Ken Fisher’s Debunkery.