Beware the fickle emotions of financial markets. If commonly used terms like “taper tantrum” and “Trump trade” aren’t clear enough, consider this – for most of the last decade, the stock market reacted poorly when good economic news was reported. Like a child who didn’t want to lose their bicycle training wheels, markets were hoping the economy was just bad enough to hold onto safety blankets like quantitative easing and ultra-low interest rates.
Large market swings are based on human emotions, not the cold, hard numbers that can actually indicate a sound investment. Don’t get caught up in Wall Street’s impulsive reactions – a sound investment is a sound investment because of its underlying qualities, not because it suddenly gained thirty percent in an unexpected market move.
In the bond market, we look at the fundamentals of the economy and the assets supporting the investment. Economic conditions change, but generally in a more predictable pattern than market conditions.
“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” -Paul Samuelson
This information is not intended to be used as the only basis for investment decisions, nor should it be construed as advice designed to meet your particular needs. You are advised to seek the advice of your financial adviser, legal or tax professional, prior to making any investment decision based on any specific information contained herein.
