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When the
financial crisis began to take its toll on the United Kingdom in 2008, Queen
Elizabeth at a meeting with financial analysts asked the logical question:
"Why didn't anyone see this coming?" Though directed at the London
financial community, it could have just as easily been put to the mainstream
media, academia, the politicians, or the regulatory apparatus of the
government. The answer she received would soon become standard fare: "No
one saw this coming." The implication, of course, was that if no one saw
it coming, then no one reasonably could be held accountable.
For countless
private investors on both sides of the Atlantic Ocean, Queen Elizabeth's
question prompted a more personalized assessment: "Why," they asked
their financial advisors, "wasn't I advised that this might be
coming?" For those completely honest with themselves, the question
reduced to "Why didn't I see this coming?" After all is said and
done, each of us is responsible for the stewardship of our own portfolios,
and to blame anyone else is pretty much an exercise in both futility and
passing the buck.
At the height of
the stock bull market in the late 1990s and early 2000s, too many investors
forgot that a healthy skepticism was part and parcel of a successful approach
to the market. Unfortunately, that loss of focus contributed to millions
believing the utopian mantra that markets and the economy no longer cycled
(the Goldilocks economy), that we were on a one-way street to perpetual
prosperity (the end of history argument), and that the stock market would
never falter again. Such unmitigated positive thinking cost investors trillions during the subsequent
stock market meltdown and credit crisis.
Ed Stein
For USA GOLD
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