The stock market has gone into whack-a-mole mode and there doesn’t seem to be any rationality left in the markets.
At the risk of boring all of you, a quick primer on the U.S. stock market. Currently, the markets are dominated by large institutional trading and multi-billion dollar funds. The retail investor (that would be you and me), has either been absorbed into the fund managers or simply too nervous to throw their money into the confusing mass of the markets.
Over the last couple of weeks, the markets have experienced head-scratching vast swings in their values. Down 600 points on one day and up 350 on another. The volatility supposedly results from fears of China’s economy slowing (they buy a fraction of our products) and the possibility the Federal Reserve will raise near-zero interest rates by 0.25% (as if anyone would notice).
None of that makes sense to explain the wild swings. The market just doesn’t make sense anymore. Trading must be a challenge. Investing remains the same: have a long horizon and a strong stomach. Over time, the market tends to reward quality investments.
What has all this to do with my headline? Well, as you might surmise, the market performance has a lot to do with my financial (and mental) stability. I’m especially sensitive to this after coming back from my (expensive) Great North American Baseball Road Trip.
That is why I know the stock market has a heart. The markets all waited until after I returned to start behaving like a drunken sailor. I can only imagine my mental state if all this happened during my 15,000 miles of driving.
The stock market may not have a brain, the way it’s acting, but it surely has a heart!