Last summer, when the market first took a swoon, the news media filled its air time and pages with the comments of financial analysts who said that people should hold their stock and that in fact the depressed prices made it a good time to buy. In fact, I dug up this BTP post which refers to BBC radio telling its listeners about the bargain basement stock prices that should encourage buying. That was back when the S&P was more than 50 percent higher than it is today.
As I pointed out at the time, a buy and hold strategy is not always best. It makes sense to look at fundamentals, most obviously the price to earnings ratio. When the ratio is very high, then there is a risk of large losses and less hope for a large sustained gain.
The media should have presented analysts making this obvious point. They rarely did. If the public took the investment advice that they receive through the media seriously, they have lost a huge amount of money in the last year as a result.
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