I’ve posted Entry #340 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Stock Market Is Cyclical But Not in the Way That You Think.
Juicy Excerpt: Stock prices do not play out in the pattern of a random walk in the long term. They do that only in the short term. In the long term, they play out in a hill-and-valley pattern. From a long-term perspective, it is not true that stocks go up and stocks go down. From a long-term perspective, high-priced stocks always go down hard and low-priced stocks always rocket upward. It makes perfect sense to ignore the unpredictable short-term price changes. But ignoring the highly predictable -long-term price changes is a dangerous and costly business