Concerned about buying at the top

PerspectiveAs the current bull market ages (from the bear market end in March 2009) investors are increasingly worried about buying at the peak. Doug Ramsey, chief investment officer of Leuthold Group, makes an interesting observation in a Barron’s article entitled Markets take a Breather. He points out that the unluckiest investor, who bought the S&P 500 at the market’s previous peak in October, 2007—just before the worst financial crisis and severest economic downturn since the Great Depression—realized a total return of 7.3% per year, including dividends. With ten-year treasuries yielding just over 2.3%, the S&P return from the October 2007 peak provides an interesting perspective for investors who stay the course.

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