If you didn't already guess it, then you know that long-term investing is dead. It's so dead that it actually stinks. The idea should be consigned to the dustbin of history and replaced with more of an up-to-date thinking. It's part of the core belief that influences the way we look at market outlooks over the next six months.
You want proof? Take a look at the S&P 500 monthly chart. We are routinely told by investment advisors that we should invest for the long term. Well let's put them to task at a 15-year time frame.
(Read More: Second-Half Stock Surge or Swoon?)
Forget individual stock picking because that's a waste of time. Evidence? Where are Enron, WorldCom, and other giants of the blue ribbon investment world? Delisted and busted. The reality is you cannot tell who will or who will not survive so we can only use the index for this exercise.
The investors who entered at point 1 in 1998 have made a 31 percent return over 15 years. That's about 2 percent per year!!! The investor who entered at point 2 has made essentially a ZERO return over 13 years. During that time he has twice suffered a 48 percent draw down. The investors who entered at point 3 has in theory made a 93 percent return over 12 years but he has watched his capital go from a 93 percent return and then drop to below zero in 2009. This is still an average of 7.75 percent per year.