I was listening to a show business radio to someone who would be considered a market expert. This individual spoke about all the news recently; the Supreme Court Judge, trade wars, elections, spy gate, and a host of other issues. These “experts” were mesmerized that the markets had not been affected. The panel began searching for any excuse of why the stock market should tank due to all the current news.
Here’s the reality…….. Markets don’t care. Just like most people don’t really care either.
The markets are efficient. Everything that is already known is priced into the price of stocks. The market is also ahead of the daily news and looking way into the future.
When you invest in the stock market, you invest in business. As a business owner I will tell you, and I speak to a lot of business owners as well, geopolitics and much of the headlines of the day are hardly mentioned. As business owners we are all working on surviving and finding ways to be of value to all clients, finding efficiency’s, and planning for the future. We all adapt, we don’t stop innovating.
All businesses do that (or should do that). That’s what the “market” is. Businesses don’t care about the news. For example, whether the Supreme Court Judge gets confirmed or not, has no bearing on the fact that owners, employees, and customers of businesses all over the world show up everyday to survive and make life better for themselves and others. All of this actually happens without even needing any government to help.
With this being said, understand that being dependent on something that has so many short-term gyrations can be hazardous to your retirement. You need to know, that there is a long-term purpose to stock market exposure in your plan. You must understand it and embrace it. In addition, understand that both ideology and news should have no place in the way you invest in the stock market.