How Bout That Market: 1-16-2017

How ‘Bout That Market?  This is a question I hear at social gatherings often enough that it makes sense to make it a regular entry on this website.

The Market

My quarterly commentary for Fairway Wealth Management is posted here.  As we approach inauguration day, it’s prudent to maintain perspective in the face of media noise.  It may be a good time to audit your news streams and trim the dead weight.  I love Twitter and Feedly as they make managing the noise easy.  The key is to cut bad sources without regret.  If the rest of your follows are solid, they will help you fill in the gaps that you may miss by posting things they think are relevant.

I cannot stress enough that investing never requires minute by minute updates.  The same goes for the news.  It is human nature to want access to news before other humans so we have an advantage, but also to signal our value as a source of information.  People who have little control over their ravenous appetite for news have conversations that sound more like they took place in a middle school study hall than an adult setting: “Oh you didn’t hear what the senator tweeted at Trump? OMG.”  Your portfolio 10 years from now will not care how overrated the President-Elect thinks that Hollywood A-lister is or that you missed Mariah’s New Year’s performance.

Have you checked your phone since you started reading this?  It pays to be more conscious of that impulse.  Once it is recognized, it can be tamed.  Sort of like realizing that people say the word “absolutely” too much.  Once you start hearing it, it stands out.

Do You Think It’ll Keep Going Up?

I think the stock market will be higher ten years from now, yes.  I do not know what path it will take to get there, but I know it will not be straight up.

The Disclaimer

Nobody knows nothin’.  The above is speculative bullshit.  If I had an inkling of what the market was about to do, I’d be on a beach in Antigua counting my money.  The same goes for your ‘stock guy’ and that dope on TV with the ponytail.  They don’t know what the market will do in the next week, month, year, or even the next 10 minutes.  They don’t even know why the market did what it did yesterday, last month, or last year, but that does not stop them from backfilling a narrative to explain an irrational, open system (as opposed to a textbook world of rational actors where all else is equal).  We humans seek these explanations out to find patterns in an effort to guide our future actions and justify past mistakes.

So why read this at all?  In my experience, 60% of people who raise the topic of investing in a social setting are seeking your approval.  30% are trying to establish themselves as an investing authority so they can sell you something.  The other 10% are genuinely interested in this stuff.  Ideally, this post helps you keep up your end of the conversation.  More importantly, I hope it helps you spot why the discussion turned to investing in the first place.