The Sky Is Falling!

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sky“Stocks are about to fall 40% – at least”

“Bad sign? Retail investors all in”

“Here’s what you should really sell in May”


These are all headlines I’ve read over the past week. While all completely different articles, they point to one thing – that signs are pointing to some sort of seismic shift in the stock market that is going to leave our online brokerage accounts in absolute shambles.

That’s the last thing I want. We’ve built a nice portfolio and we should want to protect it. That should mean that it’s about time to sell everything and take my ball home to set on the headline while the dust settles…right?!

Heck no!

These headlines, and other mass media stories claiming that it’s time to get out of the stock market are meant to do two things:

  • Get more viewers/eyeballs to consume their content
  • Use fear to get you to take some sort of action

There is one problem, well many really, that come out of this cycle. You begin to question your senses. You begin to question whether or not you’re a fool for even thinking of investing in the stock market. You then begin to wonder if you’ll ever be able to reach the goals you have in life if the market does what all the prognosticators say it will.

What do all of those things have in common? Emotion and plenty of it. Listen, I get it. I spoke with countless people who saw their 401(k) plans get sliced in half in the course of a few short months. The last thing I want is to see that happen again. However, what I do know is that those writing the above headlines and the talking heads on TV have no idea what’s going on for you. They have no special crystal ball telling them what the S&P is going to do three weeks from now. Rather, they are simply doing their job to try and get you to take action.

How Do I Not Feed the Beast?

Now that we know that these headlines and talking heads are only meant to get us to take action, a question is begged – what are we supposed to do? The calls to take action and to be fearful are all around us. How can you stay confident in your investment plan with the media beast telling you to do something?

The answer is very difficult and one that can be hard to do, but here it is:

Ignore it!

It’s that simple. You don’t have to go through any special steps. You don’t have to be in some inner circle. You simply have to ignore the talking heads. That’s it. It’s really that simple.

Now, I realize that might be easier said than done at times. But you need to take the calls to fear with a Mt. Everest sized grain of salt.

Yes, there are times when you need to analyze your investment plan. There are times when you need to rebalance your portfolio. There are times when you might need to sell an underperformer. However, none of those should be when stoked by fear.

Oh, and if you need something historical to allay your fear of massive losses – consider this…in every decade in the past century, except for one, the stock market has produced a positive return. The worst decade, the 1930’s, produced a return of just under -1 percent. For such a horrible (economically speaking) decade, I’d call that a win. 🙂


Why do you think we fall prey to calls that the sky is falling in the stock market? How often do you analyze your investment portfolio? How easy is it for you to ignore the horde?



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