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This Blast From the Past (featuring Knowlton Nash!) Affirms the Importance of Staying Invested

Occasionally as we journey across the internet, we find something that is truly awesome.  A visit the other day to the site www.thereformedbroker.com provided such a nugget.

The “Reformed Broker” Josh Brown had come across a clip from the CBC news, presumably The National, that embodied the importance of staying invested and ignoring the outrageous claims that some attention-seeking pundits make.

The clip from January 1981, starts out with CBC’s legendary Knowlton Nash proclaiming that North American shares “lost hundreds of millions of dollars today in a matter of hours”.  The cause of this panic was U.S. newsletter writer Joe Granville, who wanted his followers to sell everything.

There’s all kinds of great things about this video, but we’ll put the small f-foolishness of such a proclamation into perspective after you have a look for yourself (or you can read our perspective while the two commercials play at the beginning!)…..

The Foolish Takeaway

In January 1981 the S&P/TSX Composite Index (^GSPTSE) (which didn’t have the S&P monikor at the time) traded at a level of about 2,000.  Had you taken Granville’s advice and sold out of everything on that fateful January day, you would have hardly ever again had the chance to buy back in at this level.  The market didn’t crash as he predicted, and there was only a brief dip in the 1982/83 period that took it below the January ’81 level.  After that, it was off to the races for one of the greatest bull runs of all time, which of course culminated in the Tech Bubble of early 2000.

We seem to hear proclamations such as Granville’s now on day-to-day basis.  They continue to be horrible investment advice.  Ignore them!

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Fool contributor Iain Butler does not own any of the stocks mentioned above.  The Motley Fool doesn’t own shares in any of the companies mentioned.   

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