Worried about your investments? Here’s how the smart money made 100% when market gloom was this bad.

The best news for investors that I’ve heard in a long time is that the M.B.A. geniuses who manage the world’s pension funds now hate the stock market with a vengeance.

According to the latest comprehensive survey by BofA Securities, global investment managers are now at historic, generational levels of bearishness and gloom. Bank of America surveyed around 300 money managers around the world handling about $900 billion in assets. Depending on how you measure it, they are now as bearish about stocks as they were during the Covid crash two years ago, the depths of the global financial crisis in late 2008, the run-up to the Iraq war in 2003, the weeks after 9/11 in 2001, and the global financial crisis of late 1998.

What does this mean for you and me, retirement savers?

Everything that needs to be said about forecasting was either said by the late, great New York Yankees manager Casey Stengel (“Never make predictions, especially about the future”) or by the banker J.P. Morgan Sr., who when asked for his stock market forecast replied that he expected share prices to fluctuate.

But if the past resembles the future, the latest survey results are bullish. That’s especially true the further you are from the stock market, the less you follow it day to day, and the more you are a regular Main Street investor who puts some money into their 401(k) or IRA at the end of every month.

Out of curiosity I went back and looked at the eight previous occasions in the last 25 years when, according to BofA Securities surveys, global money managers were about as bearish and pessimistic on stocks as they are now. (Before 2008 the survey was conducted by Merrill Lynch, which was then taken over by Bank of America.)

And I looked at how you would have fared if, in each of those months, you had just gone out and invested $10,000 in the S&P 600
SML
index of small U.S. company stocks and then just held them for five years, which is about the minimum recommended…

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