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Actions Speak Louder Than Words

user profile picture Chris Martenson Sep 05, 2011
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One of the key tenets around here at PeakProsperity.com is that you need to trust yourself. The ‘advice’ we receive from Wall Street and its financially captive press about what we should do with our money is really not advice; it’s marketing.Wall Street makes money by selling stocks and bonds to whomever: pensions, retirees, moms, pops, young workers, endowments…it doesn’t really matter. The name of the game is for you to buy and then hold onto those purchases.
So when the markets hit the skids, you see endless ‘articles’ offering this very (un)helpful ‘advice’:

With the recent headlines and stock market volatility, you may be wondering if we are seeing a repeat of the market activity of 2008. This is one of the hardest parts of being a long-term investor. It’s easy to stay the course when markets are rising. It’s harder to stay the course during declines and view them as potential investing opportunities. But that’s what being a long-term investor is all about.
Remember: Stay invested – A diversified portfolio of quality investments is a sensible strategy during volatile markets.
(Source – AG Edwards client letter) 

And:

Big fund shops, including T. Rowe Price, Vanguard and TIAA-CREF, received a wave of calls from investors seeking guidance about what to do as the Dow posted its biggest decline since the financial crisis of 2008 late last week. Standard & Poor’s downgrade of the United States’ credit rating hasn’t helped soothe investor jitters either, with another 4% sell-off Monday.
“We aren’t advising people to run for the hills,” said John Woerth, a Vanguard spokesman. “This is part and parcel for the stock market, and investors who have been invested in the market for a long time have seen volatility like this before, so they’re willing to stay the course.”
(Source) 

Et cetera and so forth. The main message here is, “Stay calm, everything is all right; you don’t want to appear inexperienced and sell, as experienced people know that volatility is part of the game…”
There’s no mention in any of these articles that the stock market has gone exactly nowhere for the past 12 years, which might undermine the premise that long-term investors are best served by staying in the market. Really? If 12 years isn’t ‘long-term,’ then what is? And why would anyone want to take 0% returns with risk if they could get some returns via bonds with a lot…

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Top Comment

Chris,
Interesting read, particularly the duplicity of Wall St wrt to their own situation!
Anonymous Author by britinbe
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