10/13/2014 – Tune out the noise

noisy When the markets go down, it seems everyone and their dog has an opinion. There’s a well known saying about opinions and certain orifices that I don’t care to repeat, but the phrase “hated bull market” still seems to be holding true, with any remote pull back resulting in yells from on high of the impending market implosion. With the dot com bust and the financial crisis meltdown still fresh in many people’s minds, I understand the sentiment, but in the grand scheme of the markets, this “fear” is actually very unfounded in reality. The fact that there have been such hugh crashes within the past 15 years, makes it significantly less likely we see anything more than a 20% pullback if that. A lot of the articles you read and the resultant fear gripping headlines are a product of mass media adoption, and what will get the most readers to their websites. Fear is twice as strong an emotion as greed or euphoria by many measures, and the panic on the internet reinforces this premise. If you are an INVESTOR (especially long term), not to be confused with TRADER, then this “news” is really much ado about nothing. If your time frame is long, as the vast majority of investors should be, these minor setbacks should actually be reasons to cheer, you should be buying up stocks at the cheaper prices. If your time frame is so short that you are panicking over a 10 or 20 percent pullback, you are not an educated investor and/or you need to fire your money manager. You obviously have taken too much risk for your timeframe and should have a different investing strategy at whatever stage you are in. As for the vast majority of investors, the long term investors, the ones in their 20s, 30s and 40s that have a long term perspective… tune out the noise and stick to your strategy. Don’t be the schmuck that sells low and buys high.

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