In the investment community, short-term, sharp moves in the major stock averages are often attributed to rapid shifts in investor sentiment between fear and greed. Fear of losing everything or underperforming versus the desire to always try to make a little more or not be left behind.
This is probably as good an explanation as any for daily market moves that fluctuate widely, often with price changes, in either direction, of more than one percent.
Be that as it may. What really counts is the long-term outlook. Thoughtful investing is not about day-to-day fluctuations. Investors should continue to focus on their long-term financial goals and how to tailor a portfolio that provides the best opportunity for reaching those objectives. It’s not about where the markets closed today. It’s about where the markets are in five or ten years.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA