But my analysis should serve as a warning against complacency. Investors who allow faulty impressions of history to lead them to assume too much stock-market risk today may be inviting considerable losses.
Robert J. Shiller, a 2013 Nobel laureate in economics, is professor of economics at Yale University and the co-creator of the Case-Shiller Index of US house prices. He is the author of "Irrational Exuberance," the third edition of which was published in January 2015, and, most recently, "Phishing for Phools: The Economics of Manipulation and Deception," co-authored with George Akerlof.