by Bob French, CFA
December 21, 2018
There’s been a lot of ‘sturm und drang’ around what the markets have been doing lately. The financial media has been talking about how this is the sign of the inevitable end of the world.
Of course, we’ve had a few things lately that were also supposed to be signs the
But, well, the world is still here.
What it really boils down to is that the media is not your friend. Please don’t mistake this to mean we are screaming ‘fake news;’ but it is important to realize when networks are there to sell your attention to advertisers. When it comes to finance, the easiest way to get your attention is to talk about how you are going to lose a lot of money – either because you’re going to miss out on a great market (unless you do what I tell you to do), or the market is about to crash (and here’s how to protect yourself). Again, financial reporters aren’t bad people out to get you. It’s just that their job is to get your attention. I’m sure the vast majority of them want to help you have a better investment experience, but that’s just not where their incentives lie.
This leads to them turning whatever is currently happening in the market into the biggest event since the Great Depression, and because that’s all anyone hears, it makes sense that everyone gets incredibly worried about what the markets are doing. For my part, I think it’s worth taking a look at the data, and seeing what the market has been up