Okay days like today can be hard to watch and swallow, tomorrow morning will be no better, note the keyword morning. All of today’s headlines were negative including the fed citing a slowdown but committing to incessant liquidity buy buying government debt, the Bank of England echoing a similar sentiment and reports out of China showing slower industrial output. Holy cow no wonder the sky was falling today! Is this a surprise? Does anyone out there expect rapid growth or any real growth over the coming months or year for that matter? This perma bull doesn’t. In fact until there is pro business growth policies with conviction coming out of D.C. don’t expect too much from the private sector. With all of the real economic issues going on and the dire economic reports coming out and then the press pouncing on it, ensuing panic kicks in, hence todays market action.
In my experience when the sky is falling and panic sets in, you do the opposite. Do not get caught up in the hype of the world is coming to an end, just like you shouldn’t get caught up in the hype when the markets seem like they can go up forever. Point being, whenever I have allowed my emotions to run the show and follow the herd mentality, wrong decisions were made. We are in the dog days of August, this type of market action can happen in the dogs days of August. Not saying I like it, but cooler heads most always prevail. For me the real test will come after Labor Day and as we head into mid-term elections, so until then read a good book and keep cool 🙂
All the best.