On the Media September 2015

The reports on the markets are myopic. Investors, financial institutions and most of all the media focus on a single news story, and that consequently is what moves the markets short term. Today it is China, yesterday it was possible rate hikes, and before that it was Greece. There will always be subjects for the media to obsess on to get the viewers and readers attention. They combine hype with bits of news and escalate the information to a level of financial pornography. The fear created by this is what moves markets wildly in the short term. Even those who don’t believe the hoopla know that others are going to act on it, so fearing they’ll be left in a portfolio exposed to danger, they sell too.
Our portfolios are managed to ignore the short term fear and short term hype because we know it is just that, short term. Empirical research shows over and over again that staying invested in a well-diversified portfolio enables investors to fair better than if they moved in and out of the markets in an attempt to stay safe. The only way to insure losses is by selling into a down market. We see it too much. It’s an emotional decision made without knowledge of how the markets actually work.
Most of our clients learned this by staying disciplined through the 2008 bear market and were not permanently affected, recovering nicely. Just something to think about the next time you begin to worry.

This entry was posted on Friday, September 25th, 2015 at 3:43 pm and is filed under Blog Posts, Money Management.

Osprey Money Management, LLC. • 877-650-3796 • 321-383-4005 • 918 S. Washington Avenue, Titusville, FL 32780
Osprey Money Management LLC is a Registered Investment Advisory Firm registered within the State of Florida.