Earlier this year, I had to take a 22-hour course on behavioral finance, which is about peoples' attitudes and misconceptions about money and investing. After all, there is considerable ongoing research in this field. Frankly, it reminded me of Art Linkletter's 1957 classic book, Kids Say the Darndest Things!
However, one important point in that course was "garbage-in, garbage-out." If a person doesn't see reality clearly enough, they can NOT be expected to think about it clearly enough. I thought about that when I read the following from the respected research firm, Cornerstone Macro:
It's not often that you can say oil prices are up over 30% year to date, and investors are worried about deflation. It's not often you can say that the market is (close to) an all-time high, yet investors are worried about growth. It's not often you can say "risk-on" is working, yet bullish sentiment is sitting near all-time lows. It's not often you can say the VIX (the volatility index) is at 13, yet investor uncertainty is at modern highs?
In fairness to the average investor, how can they develop an accurate perception of reality, if they have to rely on a media that benefits financially from selling fear? My advice is not to read more -- but to read less -- financial and economic news. While censorship is bad, self-censorship has advantages. Avoid extreme predictable opinions, like perma-bear Stansberry and perma-bull Siegel. The glass is neither half-full nor half-empty at all times. Read a more neutral market observer, like Bob Doll of Nuveen.
Or, you could just read The Flinchum File . . .
However, one important point in that course was "garbage-in, garbage-out." If a person doesn't see reality clearly enough, they can NOT be expected to think about it clearly enough. I thought about that when I read the following from the respected research firm, Cornerstone Macro:
It's not often that you can say oil prices are up over 30% year to date, and investors are worried about deflation. It's not often you can say that the market is (close to) an all-time high, yet investors are worried about growth. It's not often you can say "risk-on" is working, yet bullish sentiment is sitting near all-time lows. It's not often you can say the VIX (the volatility index) is at 13, yet investor uncertainty is at modern highs?
In fairness to the average investor, how can they develop an accurate perception of reality, if they have to rely on a media that benefits financially from selling fear? My advice is not to read more -- but to read less -- financial and economic news. While censorship is bad, self-censorship has advantages. Avoid extreme predictable opinions, like perma-bear Stansberry and perma-bull Siegel. The glass is neither half-full nor half-empty at all times. Read a more neutral market observer, like Bob Doll of Nuveen.
Or, you could just read The Flinchum File . . .
