When I was actively trading, I looked at the financial news every morning to see what was going to influence the market that day. Now that I have matured (one of the only areas I consider myself “matured”) into a passive investor, I skip the doomsday predictions that once had me stressed out about short-term “investments”. If you take the rampant speculation at its word, you could be rich today….. and broke tomorrow. How are we supposed to strip the valuable information from the BS?
Rich Today, Broke Tomorrow
The only thing that goes up and down more than the stock market is the roller coaster of market predictions jammed in your face.
Some recent real-world headlines
- The Dollar is too strong
- The charts say DOW is heading into a ‘treacherous’ pull back
- A ‘meaningful’ market correction is close
- Market crash still two years away but a ‘nasty’ 10 percent correction in the offing
- A Market Crash On A Hairpin Trigger?
- A bear market could hit U.S. stocks any time now
- The two ‘most important charts in the world’ point to more fun for stock-market bulls
Some of these looked at 60 minute time slices of the Dow Index, which doesn’t matter for 99.99% of the population. Others focused on technical chart reading. Some decided we were due for a crash because of historical stock market data. And one that I didn’t include worked the upcoming eclipse into stock market predicting (no joke).
Trying so hard to bottle up a rant.
I guess Fear and Speculation is profitable.
It’s not hard to be right
One thing I notice when glancing through these articles (for entertainment purposes only) is they don’t specify the time line or any success criteria. Anyone can be right if they make a broad statement without a definitive stance
Let me try
- The Dow will hit 30,000
- The Vikings will win a super bowl (seriously, this better happen in my lifetime)
- The market will go up, then down, then way up again
Good times. I will be right. Especially on the second one.
How long have we been hearing we are at the top?
When the Dow Jones was at 18,000?
What? now 22,000?
Surely this has to be it right? I mean, 23,000? That’s just ridiculous.
If you believed the market was at its peak and we were due for a recession or correction at 18,000, you missed a 22% gain. Will it go back 18,000? Maybe. But maybe today is the lowest the market will ever be.
We thought the markets were going to get smacked twice in the last year or so, first by Brexit and then by the US Presidential Election. Neither turned out to be the investing Apocalypse everyone was predicting. Some short term volatility turned into a lot of record market highs.
Focus your attention on Valuable, Time Tested Resources
Instead of reading daily market speculation that either scares the crap out of you or gives you false hope, find some time tested resources.
A Random Walk Down Wall Street (Burton G. Malkiel) – This book does a deep dive on the history of investing and all the fads that have occurred over the years. Great history lesson for beginners and sets an investing foundation.
Anything by Jack Bogle, the Index Fund Hero who started Vanguard. Personally, I have read The Little Book of Common Sense Investing and The Clash of Cultures: Investment vs. Speculation. There are also a ton of great interviews with Mr. Bogle, most recently he was on the Freakonomics podcast episode “The Stupidest Thing You Can Do With Your Money”