Investing October 30, 2008, 5:00PM EST

So Much for Buy-and-Hold Advice

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Dong Tao, Hong Kong-based Credit Suisse (CS) chief economist for Asia (excluding Japan), adds that good companies in the region "are not going to be washed away.... Fundamentals one day will come out."

That may prove true. But the global credit crisis is a dangerous and unpredictable beast, and in this environment, history may not be the greatest of guides. William Goetzmann, a Yale University School of Management finance professor, says the serious breakdown of credit and unprecedented government intervention in the banking system make it hard to compare this period with previous ones. Too many investors focus on simple statistical formulations and fail to heed "real, serious events that could cause ruptures," says Goetzmann. "Now is the time for real caution about projecting statistical models forward."

And since equity investors are the last in line to be paid in the case of a bankruptcy, they are particularly vulnerable if the financial system breaks down. Another potential risk: While emerging-market valuations may be tempting, Mohamed El-Erian, co-CEO of bond investor Pimco, points out that stock market investors are, of course, at greater risk in countries without strong property rights and the rule of law.

Will stocks pay off in the long run? Statistics show they have in the past. But it all depends on how long you're willing to wait. Investors probably shouldn't think too hard about what British economist John Maynard Keynes once said: In the long run, we're all dead.

With Ben Levisohn and Tara Kalwarski in New York and Frederik Balfour in Hong Kong

Business Exchange: Read, save, and add content on BW's new Web 2.0 topic network

Have Patience—and Take Your Vitamins

Stocks have been the top-performing asset worldwide since 1900. The Australian and Swedish markets have led the way, with annualized real returns of nearly 8% each through 2007, compared with a 5.8% average for world stock markets. In recent years, though, bonds have beaten equities in 10 out of 17 countries, including all the largest markets, according to Global Investment Returns Yearbook. A team at London Business School, which produces the yearbook for ABN Amro (ABN), found that the annualized real return on a world index of stock markets from 2000 to 2007, in U.S. dollars, was just 1.3%.

To read a synopsis of the Global Investment Returns Yearbook, go to http://bx.businessweek.com/retirement-strategies/reference/

Coy is BusinessWeek's Economics editor.