Recession Rampage & the Media
This year the media has been talking about recessions quite a bit. May, August and now in September. Spring, Summer, and Fall. Perhaps it is just a seasonal thing, but we’ve dubbed it the “recession rampage.”
Whenever we hear something frequently, we tend to believe it or at least allow the information to influence our opinions. With the media talking so much about recessions, many investors may begin to allow that to influence their financial decisions.
The media has been predicting recessions just about every year for the past 10+ years. It’s just what they do. Fear sells, and their job is to get people to tune in, further contributing to the rampage. Had investors followed their advice previously, they would have lost out on significant market gains. Who knows whether this time will be different. It is true that at some time we will get a recession – that is just part of the economic cycle, and one of the only changes we can count on. But as Peter Lynch has famously said,
“Far more money has been lost by investors…trying to anticipate corrections than has been lost in corrections themselves.”
Each day investors face the same decision: do you want to guess whether to be in or out of the market or do you simply want to follow your financial plan? Will the news story of the day/emotions of the moment dictate your future financial decisions, or will allow your customized investment plan to be your guide?
I strongly recommend the latter.
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