HERE'S a timeless quote from Warren Buffett. "Occasional outbreaks of those two super-contagious diseases, fear and greed will forever occur in the investment community. The timing of these epidemics will be unpredictable. And the market aberrations produced by them will be equally unpredictable, both as to duration and degree. Therefore, we never try to anticipate the arrival or departure of either disease. Our goal is more modest: We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."
In his 2005 report to stockholders of Berkshire Hathaway, Buffett reminisced on how 2004 was a non-normal year with the S&P 500 index reflecting a 10.9-percent return. In fact, he asserted that over 35 years later, investors would have earned juicy returns simply piggybacking on corporate America by investing in a diversified, low index fund. Instead, many investors had mediocre to disastrous results.
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