I’m an avid golfer who probably puts a little too much time into the search for golfing perfection. In my quest to become a better golfer, I do all kinds of crazy things like practice, take lessons and recently, videoed my own golf swing in an effort to improve.
I went down a path of trying to change the look of my golf swing to be more efficient, powerful, accurate and a host of other things. I found that my effort in trying to improve my swing was somewhat counterproductive and, for a short while, made me perform worse. Why on earth would I do something like that after having one of my best years playing golf?
Here are some thoughts that might be counterproductive to your investment growth fear of market Influence:
I recently had a chance to go on a golf trip with some friends and spent all day with the group. Four hours round trip driving, four more hours of playing golf and an hour or so eating dinner. On this recent trip, one of the discussions centered around how some people have the ability to influence the market or the economy.
One of my friends said the President of JP Morgan Chase had come out and said positive things about a stock. People listened and bought the stock, sending the price higher. Later, this executive came out and said something negative about the stock and the value plummeted—causing investors to lose significant wealth. This friend is concerned about influential insiders, politicians and others “rigging” the market. He had other examples of the nefarious dealings of people in power.
Conspiracy theories
As I thought about this exchange, a thought came to me. If someone starts looking for a problem in something, they are likely to find one. I went looking to fix flaws in my golf swing and found plenty to focus on, just like my friend who went looking for a conspiracy thought he had identified.
It’s the same situation we find ourselves in every day as investment advisors. We know that all evidence suggests that the stock market is the biggest generator of wealth in history, yet many people have their heads on a swivel looking for reasons NOT to invest in stocks.
The “Wall of Worry”
One of my favorite tools to share with clients is called the “Wall of Worry.” Basically, world events are plotted on a chart of the stock market’s value over time. If you used those events as the determining factor for when you should invest in stocks, you never would.
Remember, there will always be something to “worry” about, but throughout history, if you would have ignored the news and let the stock market do its thing, you would have been rewarded.
Contact Shaw Pritchett at 334. 240.3679 or [email protected].
The Expert
Shaw Pritchett is a Financial Advisor and President of Jackson Thornton Asset Management in Montgomery
