Most of you probably opened your 3rd quarter investment statements and were disappointed and, potentially, a bit worried. We saw a lot of volatility over the past few months, and it was hard to miss the headlines, especially the day the Dow Jones Industrial Average (DJIA) opened down 1,000 points on August 24th.
I was at home the morning of August 24th waiting to take my kindergartener to her first day of school. Before the stock market opened that morning, I was bombarded with alerts on my phone notifying me about how far the futures markets were down and that the “experts” thought they might shut down the stock exchanges once they opened. I started to wonder how the media would cover this, so I turned on the news. While I was only able to watch about 20 minutes before I had to leave, that was enough time to convince me that the world was coming to an end and that there was really no point in sending my daughter to school because I needed to go to the grocery store and stock up on some canned goods.
Of course, my daughter went to school that day, and every day since, and as far as I know, the world didn’t come to an end (I know this because I have to help her with homework…did I mention she’s a kindergartener?).
Last week, my other daughter had some doctor’s appointments, so I was once again at home when the stock market opened in the morning. As my wife and I were waiting to leave, I turned on the news as I was curious to see what the news of the day would be. I was especially curious to see if they would mention that DJIA was up almost 10% during October and over 13% from the day the world was coming to end just two months earlier. Of course, they didn’t mention it. To be fair, I didn’t watch that long but, I suspect it wasn’t newsworthy.
Those of you who have met with me or read some of my blogs know that I’m a little skeptical of the media and how they cover certain events. I tend to feel the media likes to focus on all the negative events and rarely reports the good things happening, in order to create anxiety. This appears to be true once again in the reporting of the stock market on August 24th and thereafter. Once again, I think the lesson to learn here is to not overreact to a quarterly statement, a news article or an “expert” on TV claiming the world is coming to end. In the end, it’s better to focus on things you can control, like staying patient and taking a long-term approach. If you don’t, you’ll end up with a lot of canned goods in your pantry and you won’t get the luxury of helping your kids with their homework…even when they are in kindergarten (seriously, when did kindergartners start getting homework?).
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