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.
But.
What.The.F.
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?
19,000?……20,000?……21,000?
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”
Mrs. Adventure Rich says
2017-08-18 at 7:36 AMHeyyy, you must be an oracle… your predictions are spot on 😉
I am so glad I am part of the PF community, otherwise, I might be more nervous right now. Instead, I try to ignore the market, save and invest and let it play out for the long game.
Apathy Ends says
2017-08-21 at 4:19 PMI really hope so! If the Vikes make the super bowl I will be dropping some serious cash!
Having a community to talk with and keep us focussed is amazing
Mrs. Picky Pincher says
2017-08-18 at 8:02 AMI do admit I’m getting tired of the doom-and-gloom blogs and articles about the economy/stock market. Naturally we’ll have a recession and sure, we’re overdue for one. The best thing we can do is keep truckin’ on and enjoy things while the going is good. No sense in freaking out, since the market naturally ebbs and flows.
Apathy Ends says
2017-08-21 at 4:22 PMThe amount of fear that is spread through media outlets is baffling, if they focused on general education maybe they would actually help some people
Brian says
2017-08-18 at 9:46 AMLong-term index fund investing is king and the opposite of whatever Dwight Schrute is doing. Vikings have 40-1 odds to with the big game this year. Any given Sunday. 🙂
Apathy Ends says
2017-08-21 at 4:24 PMhaha, 40-1…. I will be in Vegas for opening weekend, may be I should through down a bet.
Mao says
2017-08-18 at 10:35 AMIt took me a while to figure out that the media is really in the business of making headlines, not unbiased opinions. After a few days up, headline shows Dow tumbled 50 points on CNBC, really?… VIX spiked and all that. Come on…
Index investing for me also creates an ease that simplifies my life versus active trading that I used to do. Which I enjoy a lot.
Apathy Ends says
2017-08-21 at 4:29 PMYea, they can really turn a .5% day either direction into a big deal. I wonder how long their writers last pumping out content like that.
J. Money says
2017-08-18 at 10:56 AM… and by Vikings you meant Redskins, right?
(RIGHT???)
Amy @ LifeZemplified says
2017-08-18 at 1:14 PMI know he certainly didn’t mean the Lions.
Well said, AE!
Mustard Seed Money says
2017-08-20 at 10:56 AM#HTTR
Although they have looked pretty putrid in the preseason 🙂
Apathy Ends says
2017-08-21 at 4:31 PMHa, no.
Brad - MacimizeYourMoney.com says
2017-08-21 at 7:28 PMHAIL TO THE REDSKINS!
Cody @ Dollar Habits says
2017-08-18 at 12:23 PMGreat advice here, Mr. AE! I once wanted to be a trader, but thankfully wised up prior to jumping in and chose index funds instead. I’m pretty sure I would have lost my shirt as a trader.
Apathy Ends says
2017-08-21 at 4:32 PMIt is very entertaining, but way too much work to keep up with and in the long run you end up losing. Glad I found the right path.
[email protected] says
2017-08-18 at 2:12 PMReminds me of a headline I saw last night-“DOW Ends Longest Peaceful Streak in 22 Years!” That was in the Wall Street Journal, and if you read the article you find out its talking about the fact that the market went 63 days without rising or falling more than 1%. Really? And for that you wrote a click-bait headline? Ugh.
Apathy Ends says
2017-08-21 at 4:45 PMLovely, the stats they make up and track are crazy! Who cares!
Gary @ Super Saving Tips says
2017-08-18 at 3:15 PMIt’s hard to tune out all the noise, but it’s so vitally important to your future. These doomsday predictions can slice and dice statistics and trends to make any kind of point they want, but in the end they just prey on your emotions. Better to invest with your head.
Apathy Ends says
2017-08-21 at 4:47 PM100% agreed Gary, trends to support theories that don’t even matter to the average long-term investor.
Brad - MaximizeYourMoney.com says
2017-08-21 at 3:29 PMI’ve enjoyed following the market in the past. I never trade on news though – serious buy-and-hold guy here. Lately I’m losing interest in it all though. I feel the temptation to just check how the market closed each day, but I’m fighting that. I suspect it is more habit than anything else. Since I’m not trading on the news, why bother. It’s an irrational pull though that I feel and have to work against right now. Suspect it will go away over time and I’ll just forget about it. I really only need to check each May when I do my drawdowns.