Overcoming Investing Fear
(and Generally Feeling Better)
(and Generally Feeling Better)
For the most part, my clients are excellent during times of market turbulence. We've been through it so many times, and those that do call when the market is collapsing are usually wondering what to buy. In the last two days, the market has moved, counting the intraday jiggles, about 2000 Dow points.
I did get one nervous call today, and one guy who was kind of depressed, and I can tell you that there is one common denominator for clients who are fearful or depressed, so there is one question I always ask:
"How much TV have you been watching?"
And the solution is very simple. In fact, there is a chapter in my book-in-process whose title sums up the solution:
"Click"
One night, several years ago, the platinum wife Melanie and I were watching our local 11 PM News, and the first five items in the news that night were, I believe, a fire, a murder, an armed robbery, and updates on a rape case and a political scandal... at which point, I turned to Melanie and said, "Why are we watching this?"
Neither of us had a good answer to that question, so off went the TV and out came the books. And I don't believe I have watched a "news show" since. For the major media, both local and national have an overriding principle for choosing what we should see:
"If it bleeds, it leads"
Now I know there's a certain fascination with tragedy, disasters, the macabre, the weird, the sensational, etc. But I have found that I can get along just fine without knowing what is going on with Michael Jackson, Paris Hilton, O.J. Simpson, etc., etc., etc. Or then there is the other always popular theme, "What should you be afraid of next?" Anthrax? The latest epidemic? The latest defective product?
Not that I am uninformed. Thanks to the internet, where you can "pull" the items that really are news and leave aside the sensational, I am probably better informed than when I was letting some executive at a major netwok, with whom I probably disagree about most everything, "push" information to me, thereby deciding what I should and should not know.
Now I know the 24 hour news channels have a lot of time to fill, and to some extent I know that they're just giving the public what they want. But a steady diet of what they serve up is just not good for one's well being.
Here's an example... Toward the end of the week of 9/11, I was talking with a friend, who was telling me how depressed he was feeling. I knew he was a big TV watcher, so said, "Let me ask you a question. How many times would you say you have watched that plan fly into the World Trade Center?" And he answered, "Probably a thousand."
Melanie and I went to the Newport Boat Show that day. We just had to get out. I think a lot of people felt that way. You just needed to do something "normal." But by that night, I was back home online reading what we as a country should do about it.
Now I don't mean to understate the pain of victims of crime, or terrorism, or natural disaster. It's just that we need to be careful about what we bring into our living rooms.
I will blog much more on other aspects of this topic in the future, as I build what will be in my book, Platinum Living.
But for now, let's get back to what brought up the topic in the first place. The effect on your investing. I should probably credit the major media for helping me time one of the best investments I ever made. By the Spring of 2003, The market had been dropping since March of 2000. It had looked like it was leveling off around the time of 9/11, but that direct strike at our financial center probably put off the rebound. Anyway, it was a depressing time in the stock market.
It was convinced that this was one of those 2-3 opportunities that occur PER DECADE to buy stocks at such a bargain. It was the time leading up to the invasion of Iraq, and the major media was FULL of predictions of the carnage that awaited our troops, the predictions that Saddam Hussein was going to light up his oilfields, the "mother of all battles" predictions, etc. The predictions were so pervasively gloomy that even I couldn't avoid them. And that's when I decided to make three modest purchases. I didn't want to risk much money so I actually bought options instead of the stocks.
I'm running long on this article so I'll cut to the chase by saying those were three of the best investments I ever made. The worst of the three TRIPLED.
So don't think I'm saying that the major media have no value in your investments. Quite the contrary. You can make a lot of money betting AGAINST them. :-) Bob
I did get one nervous call today, and one guy who was kind of depressed, and I can tell you that there is one common denominator for clients who are fearful or depressed, so there is one question I always ask:
And the solution is very simple. In fact, there is a chapter in my book-in-process whose title sums up the solution:
One night, several years ago, the platinum wife Melanie and I were watching our local 11 PM News, and the first five items in the news that night were, I believe, a fire, a murder, an armed robbery, and updates on a rape case and a political scandal... at which point, I turned to Melanie and said, "Why are we watching this?"
Neither of us had a good answer to that question, so off went the TV and out came the books. And I don't believe I have watched a "news show" since. For the major media, both local and national have an overriding principle for choosing what we should see:
Now I know there's a certain fascination with tragedy, disasters, the macabre, the weird, the sensational, etc. But I have found that I can get along just fine without knowing what is going on with Michael Jackson, Paris Hilton, O.J. Simpson, etc., etc., etc. Or then there is the other always popular theme, "What should you be afraid of next?" Anthrax? The latest epidemic? The latest defective product?
Not that I am uninformed. Thanks to the internet, where you can "pull" the items that really are news and leave aside the sensational, I am probably better informed than when I was letting some executive at a major netwok, with whom I probably disagree about most everything, "push" information to me, thereby deciding what I should and should not know.
Now I know the 24 hour news channels have a lot of time to fill, and to some extent I know that they're just giving the public what they want. But a steady diet of what they serve up is just not good for one's well being.
Here's an example... Toward the end of the week of 9/11, I was talking with a friend, who was telling me how depressed he was feeling. I knew he was a big TV watcher, so said, "Let me ask you a question. How many times would you say you have watched that plan fly into the World Trade Center?" And he answered, "Probably a thousand."
Melanie and I went to the Newport Boat Show that day. We just had to get out. I think a lot of people felt that way. You just needed to do something "normal." But by that night, I was back home online reading what we as a country should do about it.
Now I don't mean to understate the pain of victims of crime, or terrorism, or natural disaster. It's just that we need to be careful about what we bring into our living rooms.
I will blog much more on other aspects of this topic in the future, as I build what will be in my book, Platinum Living.
But for now, let's get back to what brought up the topic in the first place. The effect on your investing. I should probably credit the major media for helping me time one of the best investments I ever made. By the Spring of 2003, The market had been dropping since March of 2000. It had looked like it was leveling off around the time of 9/11, but that direct strike at our financial center probably put off the rebound. Anyway, it was a depressing time in the stock market.
It was convinced that this was one of those 2-3 opportunities that occur PER DECADE to buy stocks at such a bargain. It was the time leading up to the invasion of Iraq, and the major media was FULL of predictions of the carnage that awaited our troops, the predictions that Saddam Hussein was going to light up his oilfields, the "mother of all battles" predictions, etc. The predictions were so pervasively gloomy that even I couldn't avoid them. And that's when I decided to make three modest purchases. I didn't want to risk much money so I actually bought options instead of the stocks.
I'm running long on this article so I'll cut to the chase by saying those were three of the best investments I ever made. The worst of the three TRIPLED.
So don't think I'm saying that the major media have no value in your investments. Quite the contrary. You can make a lot of money betting AGAINST them. :-) Bob
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