Unfortunately the media knows exactly how to influence our behavior as investors and it can be more harmful than helpful. When the market gets volatile, the media tends to multiply that effect by making generalized statements that mislead you to thinking people are heading for the hills. They may allude to the effect that people are stock piling their cash when truth be told, the vast majority of investors are sitting tight during the volatility. They do this in hopes of triggering a herd-mentality. We think there is safety in numbers so investors want to follow the herd and change course of action, when truly, this is not what should be taking place.
Uncertain times call for investors to scramble and read into third-party expert theories. I like to remember this saying from Lauren Templeton, “Successful investing relies on rational decision-making, which in many instances requires delayed gratification.” Always remember, keep your head in the game and do not buy into all the hype the financial media is drumming up.
