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Michael List

April 17 , 2017

The Last Two Times After The Government Reported Data Like This, Stocks Crashed

Stocks Crashed


I’ve had to face a harsh reality recently. Up until the last few weeks, I naively believed there are a few certainties in life: death, taxes and everything you read on the internet is true. Scrolling through many news composite websites, you often see contradictory headlines with opinions and data to support the authors’ premise. Notable headlines today “The Last Two Times After The Government Reported Data Like This, Stocks Crashed” – “Ignore the Stock Market Valuations, Stocks Are Headed Higher” – and my favorite, “Huge 30% stock surge could be ahead; Like 1999, 'cannot afford to miss it'.”  These headlines are sensational, generally not very useful and I think most of us take them with a grain of salt.  As for the title on this email, nobody knows for sure - but it sure is effective getting readers’ attention. And because we cannot be certain of the outcome we construct portfolios to be ready whether the headline of the day is true or false.


There are other type of blogs and articles that are meant to be more informational and useful. They include principles along with facts and history. Generally, these can be a great resource to expand your knowledge and understanding of financial markets. However, it is important to always use critical thinking. Sometimes facts can be manipulated or misrepresented, as they were in a separate article I just read. The author was covering investment myths and principles. Principles I found useful were: understanding what you are investing in, have an emergency fund, and budget so you have margin for savings and unexpected expenses. But mixed with these principles were myths that seemed counter to my prior training and study. The investment myths involved compound interest, growth, and asset allocation. As I dug into the author’s research, I found he either manipulated the data or just didn’t understand the basic financial concepts of compound interest and asset allocation. Either way it is disappointing and frustrating when blogs or articles are misleading. 


There are many websites I have found to be reliable for general information including Investopedia and Bloomberg. Also, we are excited to announce the launch of our new website later this week. Visit our website to check out the new look, quality information, and useful tools, from a trusted resource. 


If you would like to discuss how you can be more prepared for the future, please call Security National Bank Wealth Management advisorWe are always willing to help.  


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