All the news of the day – it’s in there.
I received an email from an avid reader, who linked to an article about “the end of the US Dollar” and asked what that might mean for stocks.
After I replied, I received a near-immediate response with “Well, what do you think negative interest rates will do to the market?”
sigh.
Remember, headlines are written in a way to make us fret over:
- Tariff wars
- Trade tension worldwide
- White House tweets
- Brexit
- European recession threat
- Cyberattacks
- Hurricane Dorian
- The future of the US dollar
- Budget deficits, soaring national debt
- Negative interest rates
- Profit and Earnings “recession”
Looking at this list reminds me of the story behind Billy Joel’s song from 1989, “We Didn’t Start The Fire!”
Two things about that song:
1. I cringe when anyone uses “we didn’t start it” as their crutch. Weak.
2. That song is now *thirty* years old. AND some of the stories have NOT changed!
As Billy Joel put it, he: “got the idea for the song when he turned 40. He was in a recording studio and met someone who just turned 21 who said “It’s a terrible time to be 21!”
Joel replied, “Yeah, I remember when I was 21. I thought it was an awful time. We had Vietnam, drug problems, civil rights. Everything seemed to be awful.” The friend replied, “Yeah, but it’s different for you. You were a kid in the fifties and everybody knows nothing happened in the fifties.”
Joel retorted, “Wait a minute, didn’t you hear of the Korean War or the Suez Canal Crisis?” Joel said those headlines formed the basic framework for the song. He said, “There’s an element of malevolence in the song; it’s like waiting for the other shoe to drop.”
We seemed to have “pushed the envelope” in the news cycle to another level. And making investment decisions based upon the headlines of the day is a bad plan. Like waiting for the other shoe to drop.
Bottom line: if you want something – a reason – to worry about, there is plenty to choose from on the menu.
Which brings me to this:
Remember that TV commercial for Prego sauce from the early 1980’s (or is it “gravy”?)
Prego dubbed the phrase, “it’s in there!”
Now look at the track record for the markets. Everything – all the headlines you could worry about – from the 1940’s, 1950’s, 1960’s, 1970’s, 1980’s, 1990’s and beyond: “it’s in there!”
And yet, the market trends higher. It may not always move at the pace we want. And it may slumber for several years at a time, and even move down violently now and then.
But all those headlines, all that news…
It’s in there.