Following on from my post, Adding a pandemic to the list, Chris Mayer, (author of the book ‘100 baggers’), made a similar (and more instructive) point in his recent post Buying and Selling. Chris was kind enough to share with me the survey he referenced by Bank of America, which was published in the Financial Times, showing the 'Largest market tail risk by the percentage of respondents ', over the past ten years.
Due to the quality of the image (below), I’ve summarised these tail risks over the that respondents (who were ‘professional money managers’) were most fearful of:
2010 to 2012: ‘EU sovereign debt funding’
2013: US ‘fiscal cliff ’
2014: China ‘hard landing’
2015: Geopolitical crisis
2016: China ‘hard landing’
2017: Political populism
2018: Quantitative tightening
2019: Trade war
2020: US Presidential election
2021: Coronavirus
From 2010 to 2021, whilst market participants were worried about these ‘tail risks’:
The ASX200 accumulation has risen from 32,768 to 82,641, 9.6%pa
The S&P500 from … 1,268 to 4,223, 12.7%pa
The NASDAQ from … 2,489 to 14,096, 18.69%pa
In short … worry less … invest more
