Investors are seized by optimism. Can the bull market last?

Bull marketsspdax, according to John Templeton, “are born on pessimism, grow on scepticism, mature on optimism and die of euphoria”. The legendary Wall Street fund manager put this philosophy into practice in 1939. At a time when others were panicking about Europe’s descent into war, Templeton borrowed money to buy 100 of every share trading below $1 on the New York Stock Exchange. Within a few years he had booked a 400% profit and forged a template for future investors. Even in the 21st century, Templeton’s favoured moments of “maximum pessimism” present the very best buying opportunities. In March 2009 investors despaired over the future of capitalism; in March 2020, over a pandemic and shuttered businesses. Both times, the correct response was to close your eyes and buy stocks.It now looks like October 2022 should be added to the list. Pessimism was certainly rife. Central banks were raising interest rates at their fastest pace in decades. was hitting double digits in the euro zone and falling only slowly in America. Recession seemed just about nailed on. War had returned to Europe. China appeared trapped between lockdowns and soaring covid-19 deaths. Across the northern hemisphere, a cold winter threatened to send energy prices soaring again, turning a miserable downturn into a truly dangerous one. America’s & 500 index of leading shares was down by nearly one-quarter from its peak; Germany’s by more.