A quick update on the passing scene…
Friday, and the following Monday, the markets declined precipitously in response to the news.
However, the markets recovered Tuesday and Wednesday. As of this writing, at the market close on Thursday 6/30/2016, the Dow is at 17,929.99, only 81.08 points below the 6/23 close. The low for the Dow for this event was 17,063.08 on Monday, 6/27/2016, or 947.99 points below the 6/23 close.
If anything, this illustrates how short-term events, even when the outcomes for these events won’t be evident for months, or even years in the case of the Brexit, can cause the markets to act irrationally in the short term. In light of this, we would like you to consider and remember the following when it comes to media reporting and investment strategy:
First, doom and gloom creates ratings. Nobody ever reports on all of the airplanes that landed safely today.
Next, news outlets are a business first, and an information source second. They have 24 hours of airtime to fill every day. This is why seemingly innocuous events (such as anything Kardashian or Kanye West related) get so much coverage.
Finally, remember that short-term reactions can cause long-term harm to a well developed, properly executed investment program. Those who sold out on Monday and are holding cash may have done damage to their portfolios that could take a long time to correct.
Happy Fourth of July from the crew at Eagle Financial. We hope you all have a safe and fun long weekend.