Because it's Tuesday

Every day begins with pronouncements from every media outlet about what is happening in the financial markets...and why. Ever wonder who decides what the reason du jour is and where it comes from? Often, it appears that they would be better off saying "the markets are up or down today...because it's Tuesday".  As nonsensical as that might be, it would likely be more accurate. The attached article by Selena Maranjian on Motley Fool has a great chart that explains why stocks may go up and down (pay particular attention to the end of the chart).

Day to day (even month to month) price movements in the financial markets are very close to being meaningless except for the fact that the media has to talk about something. So they do just that. What investors must comprehend, however, is that almost all of this media coverage, is little more than theatre. Just because a copy writer at a TV station or newspaper says the market is doing something because of some reason does not make it so.

Over a decade ago I wrote a booklet titled "Timeless Wisdom" and I warned against ingesting too much "financial junk food" as it would be harmful to wealth creation. This is still true today given the barrage of information of all types that come into our view every day.

Purposeful portfolios focused on long term goals allow you to tune out the potentially harmful background noise of the media. No one knows the reason for a particular zig or zag in the markets because no comprehensive reason exists (save some huge external event like 9-11). We always "begin at the end" when we build investment strategies for clients. That is, what is the purpose of the money and when will it likely be needed?

We started out almost 30 years ago to change the way investors thought about money. Don't keep us a secret.

  - James E. Wilson, CFP�