Print media lasts forever. Thus, the clues to investors misguided behavior can be found in the old pages of journalism. People often are dismayed that they made bad investment decisions generally due to the emotions of fear and over-confidence. But how does that fear enter our minds?
Look now further than the pages of so-called “financial” newspapers and magazines. The link below captures the statements that were written and thus discussed by investors and their friends doing some of the worst stock markets over the last 60 years.
The stock market slide isn’t over yet.
— MoneyWeek, March 2, 2009
This was written in MoneyWeek in the month of the last market bottom. What followed that statement was the S&P 500 – the large U.S. company stock index – set to return 104% over the next three years.
It is an indictment of the way journalism works and is a warning to all investors to plan for the future and understand that stock markets have cycles and no one can predict what is coming next in the short term. The key for investors is to focus on the long-term trends in order to capture the returns needed for their goals.
This article is similar to the video that I attached a few months ago “The Idiot-Maker Rally” showing the TV commentators with their stellar predictions. Click here to see that post.
This written piece by M. Housel captures the mis-timed pessimism throughout several of the worst bear stocks markets in the United States including the last “Great Recession” in 2009. Beware of the cumulative effect that the news and people’ s discussion have on your emotions to sell at exactly the wrong time for the wrong reasons.What Newspapers were Saying When You Should Have been Buying
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