Old wisdom on stock market volatility

The markets goes up strong one day, and down strong the next. Volatility is the age-old enemy of rational decision making. The bit of wisdom below has been floating around for decades, yet seems lost on most investors. Days with “good” news has your average investor rushing to buy while days with “bad” news has everyone wanting to sell. The original version of this hangs behind my screens to remind me of these daily emotional swings. It was handed down as a photocopy, having been reproduced time and time again. I suppose it is time for a digital version.

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July 26, 2010 - Posted by Brett | Markets, Quote, Lore, Wisdom | lore, volatility

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About

Brett Spurr has been on and around Wall Street since the age of 19, nearly half a lifetime ago. He helped make investment decisions for a $15 billion mutual fund complex. While locking horns with CEOs was fun, he now runs a personal financial planning firm helping individuals navigate their financial lives. Brett is a CERTIFIED FINANCIAL PLANNER ™ certificant and investment manager by day and a full-time geek who delights in debating all things financial or economic.

Karl Mamer is host of The Conspiracy Skeptic podcast, a 12-part look at conspiracies of today and the not too distant past. Karl is also the world’s greatest living proponent of Franglais. He also likes to bait Nigerian Bank Scammers and hosted his own podcast about teaching English in Seoul, South Korea. Karl lives in Toronto, Canada and works as a senior technical writer to pay the bills.

Julio Guardado is a former tech CEO who after surviving a tech start-up during the dot com bust decided to join the dark side and become an investment banker. While wining and dining CEO’s (we call it “locking horns”) is great, he enjoys getting inside their heads and companies even more. Julio also runs RV Investor, a web site that specializes in the recreational vehicle industry. Julio lives in Silicon Valley.

Jon Blumenfeld has been on and around Wall Street since 1989, as a trader and researcher in interest rates and their associated financial products. Most recently he was an Interest Rate Strategist at Bear Stearns and Co., where he was named to Institutional Investor Magazine’s All-America Fixed Income Research team for Interest Rate Derivatives in 2007.

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