Wall Street Gibberish Sounds like the Adults in Charlie Brown


When you hear that stocks down 20 basis points, emerging markets are up, or oil futures are down, does that mean anything to you?  Daily stock market updates are typically jargon and noise.  To me, they sound like adults talking in the Charlie Brown movie, “wah wah woh wah.”

In addition to all the jargon, Wall Street is constantly spewing noise that tells us to change our investment strategy frequently; invest in energy stocks this week and gold the next or foreign stocks on Tuesday and domestic stocks on Wed.  Again, it sounds like, “wah wah woh wah wah.”

 The truth is that the daily swings of the stock market are irrelevant to most middle class people.  It’s important for people buying and selling stocks every day.  (Hmm, who could that be?  Answer, Wall Street folks.)  Your retirement account should have mutual funds that you hold for 5 – 40 years.  Over the long-term, these swings don’t make a significant impact to the fund.      

Here’s a simple truth: The most solid way to accumulate wealth is not stock investment.  It’s sticking to a holistic financial strategy including:

  • Playing good defense:
    • Minimizing your expenses
    • Avoiding consumer debt by
      • Using your savings to pay for large purchases
      • Decreasing your spending to focus on activities that bring the most fulfillment  
  • Playing simple offense:
    • Choosing a job you enjoy and get paid for
    • Sticking to a simple investment strategy for your retirement accounts
    • Planning ahead and negotiating on large purchases to minimize costs

Notice I said nothing about day trading, looking for the next hot stock, or other time-wasting activities.  Life is about living!  Unless your idea of a fun Saturday afternoon is day trading or stock research, you should:

  1. Develop a holistic financial strategy,
  2. Stick to it for several years, and  
  3. Make minor tweaks once or twice a year. 

That’s it!  Don’t worry about the daily market swings.  Next time you hear daily financial news, just remember, “wah wah woh wah wah.” 

What does all the financial jargon sound like to you?  Have you ever acted on short-term stock tip?  Has any of it ever helped you?  Do you have a holistic financial strategy? 


Advertisements

2 responses to this post.

  1. One defense for the stock market, by investing in a diversified portfolio, a person will yield higher interest than just leaving his/her money in a bank account.

    I do agree that the daily gibberish in quite unnecessary.

    Reply

    • Monica,

      Agreed! A portfolio that’s diversified across asset classes should yield a higher return over the long-run than stashing the money in the bank. The stock market is great for that type of investing. You know your stuff!

      Happy to have you on the site.

      Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: