Newspaper article The Evening Standard (London, England)

Picking upon the Footsie Casualties; Business Day

Newspaper article The Evening Standard (London, England)

Picking upon the Footsie Casualties; Business Day

Article excerpt

EVERYBODY says that the time to buy shares is when markets are falling, and that if we only had the courage to buy at these levels we would, like Sir James Goldsmith, be sitting on vast profits in a very short time.

After all, the lesson from the crash of 1974 was that blue-chip shares in leading companies doubled in price in the first three months of 1975 after a slide of 70%.

They also recovered smartly after the crash of 1987 and ended that year higher than they started it.

That drop now looks like a tiny blip on the long-term chart of the FTSE 100 index.

But it is not a guaranteed formula. People who bought just before the 1929 crash waited until the 1950s before the American market was that high again and it later took 15 years for the Dow to surpass its peak of 1966.

Buying shares for the long term is fine, but timing still matters for, as economist John Maynard Keynes once observed, in the long term we are all dead. …

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