PRNewswire -- Some remember the 1970s when the stock market index was flat for an entire decade. Due to the OPEC oil cartel driving energy prices way up while inflation was simultaneously ratcheting up, the market went sideways.
"Now, thirty years later, we appear to have circled back for a repeat of that disappointing decade," says Thomas E. Quinn, the chief executive officer and chief investment officer of Atlanta-based CornerCap Investment Counsel, in a recently published commentary.
"Over the nine years between 1999 and 2008, a period many have referred to as the 'Lost Decade,' the S&P 500 stock index was down 6.75 percent or -0.8 percent annually and, like the 1970s, energy costs are once again skyrocketing, crowding out consumer purchases and contributing to fears of inflation," Quinn notes.
Noting that CornerCap's equity returns during this period were well over the averages of the Lost Decade, Quinn says a disciplined investment process that recognizes the booms and busts of the short-term market swings is the key to avoiding long-term pain.
"There is no magic," Quinn says. "Beating the averages over time requires a consistent philosophy and strict adherence to a buy / sell discipline which keep the probabilities in your favor."
The full text of Quinn's commentary is available online and may be downloaded at no cost from
According to Quinn, fear appears to be rampant now, with many investors selling their stock holdings. But probabilistically, Quinn says, broad selling now makes absolutely no sense.
"We can realistically observe the behavior of other investors," Quinn says. "We can objectively quantify when their behavior overpower the facts. In the long cycles, we can take advantage of those infrequent, but really extreme, investor obsessions. In the short cycles, we can continually rebalance our portfolios," he says.
"Simply stated, if we pay attention to probabilities rather than the pundits, we may lose a few small hands but we should ultimately win the game," Quinn says.