Keynes quote is well understood by most modern economists. Keynes shifted focus from 100% belief in the long run to a system where we try to smooth out the valleys as much as possible while working towards to long run. I'm not really sure what sort of point Bernstein is trying to prove by dropping it in his story, but it seems misinterpreted.
Also, his point of "More important, not all investors can afford to hang on for the long run" is misguided. INVESTORS shouldn't be investing in high-risk speculation unless they can invest for the long run. Otherwise, there are plenty of investment options that will return more modest rates with significantly less risk. I'd imagine the bulk of your average American's market exposure is through their 401(k) plans, which are certainly long run investments. Maybe people are a little more speculative with their non-retirement investments than I thought.
The entire basis of his story seems to be that just because the markets grew at X average over the past century that it won't mean that it will grow at X average over the next century. Even that statement isn't entirely true and everything past that premise in his article was poor. I just don't see any value in this at all.
Also, his point of "More important, not all investors can afford to hang on for the long run" is misguided. INVESTORS shouldn't be investing in high-risk speculation unless they can invest for the long run. Otherwise, there are plenty of investment options that will return more modest rates with significantly less risk. I'd imagine the bulk of your average American's market exposure is through their 401(k) plans, which are certainly long run investments. Maybe people are a little more speculative with their non-retirement investments than I thought.
The entire basis of his story seems to be that just because the markets grew at X average over the past century that it won't mean that it will grow at X average over the next century. Even that statement isn't entirely true and everything past that premise in his article was poor. I just don't see any value in this at all.