You’d have to have been living under a rock, meditating in a Buddhist monastery high in the Himalayas or lost at sea to not know that global sharemarkets have been taking something of a beating over the past couple of months.
With headlines like “Local sharemarket sheds $50 billion in worse one-day fall since February” screaming at you from your morning newsfeed it can be difficult to keep a sense of perspective when the occasional, invariable, bout of market jitters occurs. There is more than a grain of truth to the old news adage, “If it bleeds, it leads”.
Some researchers suggest that humans may have a “negativity bias” hardwired in our subconscious, and that our brains are more sensitive to signs of threat than to those of opportunity.
In prehistoric times such a bias could well have been an advantage, keeping early humans safe from harm. But in today’s world of global, instantaneous, round-the-clock news, that bias to action in the face of danger could end up costing you a fortune.
Continue reading “Why financial news is making you anxious, impatient & poor”
There’s a saying among seasoned pilots that flying can best be described as long stretches of boredom punctuated by moments of sheer terror.
Many investors, reeling from the recent pullback in the US sharemarket that commenced on 5 February after the stellar returns of 2017, would no doubt share these sentiments.
For newer investors who’ve never experienced a share market pullback of this size and speed, the recent movements must have been nerve-wrecking. Media headlines screaming “market rout”, “bloodbath” and “worst point decline in history” certainly didn’t help matters either, stoking fear in the investing public for the sake of clicks, views and readership.
If you’ve just had your first experience of a sharemarket dip, welcome to the club. Grab a seat and catch your breath. It may be your first market correction but it will almost certainly not to be your last. All-time sharemarket highs followed by the occasional reversal are a feature, not a bug, of long-term investing.