Anyone Can Sound Like a Market Expert
By Martin Krikorian
Over the years, the investment industry and financial media have convinced investors to believe that stocks move up and down for identifiable reasons. On any given day there are usually a few positive and a few negative new stories that can be spun to explain the markets movement.
Whatever direction the market happens to move, the financial media simply fills in the blank (“The stock market is up or down today because ...”) with one of those positive or negative news stories to explain the markets movement.
“Stocks Soar as Trade War Fear Ends” -- CNNMoney, March 5, 2018
“U.S. Stocks Fall as Trade War Fears Rattle Markets” -- Wall Street Journal, June 25
What if it’s a slow news day without any major breaking-news events? How do you come up with a reason to explain the markets movements?
Since you are portrayed as an expert on the market, you have to say something. You can’t admit the truth and say “you don’t know. Not to worry, just do what the “real stock market experts” do.
There are all sorts of clichés, explanations, and catch phrases the investment industry uses to describe the stock market. Many of these explanations have been used for decades. There isn’t a day that goes by that someone on CNBC or any of the other cable business channels uses one of these ridiculous phrases, to describe the stock markets current or future movements.
The following are a few of my personal favorites:
“Stocks are down on profit taking.”
“Stocks are up on bargain hunting.”
“The market is taking a breather.”
“We’re cautiously optimistic.”
“We’re taking a wait-and-see approach.”
“We’re waiting for more certainty.”
“There’s lots of cash sitting on the sidelines.”
“The smart money is ...”
“Time to take some money off the table.”
“It’s already factored into the market.”
Translation: “I haven’t got a clue, but I have to say something.”
Every time I hear someone on CNBC, Fox Business, or any of the local talk radio business programs come out with one of these phrases, I just shake my head.
There are literally thousands of unknown and unexpected events that that cause stock market prices to move up or down from one day to the next. For someone to actually think they know what these events are going to be over the course of a year is laughable.
Martin Krikorian, is president of Capital Wealth Management, a registered investment adviser providing “fee-only” investment management services located at 9 Billerica Road, Chelmsford. He is the author of the investment books, “10 Chapters to Having a Successful Investment Portfolio” and the “7 Steps to Becoming a Successful Investor.”
Martin can be reached at 978-244-9254, Capital Wealth Management’s website, www.capitalwealthmngt.com , or via email at email@example.com .