Look Past the Headlines for Stock Returns

If you are interested in knowing how the stock markets are doing, you have to look past the headlines.

I don’t know how many times I’ve gotten an alert on my phone and saw a headline that said “Dow Plunges!” or “NASDAQ Tumbles!”, and I’ve gone and looked to see what happened and those markets were down like 1% or 0.9%. That’s not really a tumble.

If you went to the grocery store and your favorite tuna went from $2 to $1.98 and the guy there says, “Oh look at that – the price just plunged!” you wouldn’t really believe that and you’d be right.

The other thing is that those headline numbers of the stock market probably don’t correlate to your portfolio (they shouldn’t, anyway) because they always talk about the Dow and occasionally they talk about the NASDAQ. The Dow is only made up of 30 large U.S. stocks. The NASDAQ is more stocks but it’s mostly tech stocks. There are no bonds, and again, it’s also all U.S. stocks. The best correlation with your U.S. stocks is probably the S&P 500 or the Wilshire 5000, but they never comment on them because nobody knows where they are.

The main point is don’t panic when you see those headlines. Realize that how you are personally positioned is probably different and possibly very different from what those headlines say, and again, there’s no reason to panic.

The post Look Past the Headlines for Stock Returns appeared first on Yardley Wealth Management, LLC.

About the author

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Michael J. Garry, CFP®, JD/MBA

Michael Garry is a CERTIFIED FINANCIAL PLANNER™ practitioner and owner of Yardley Wealth Management in Yardley, PA. Michael is a NAPFA-registered Financial Advisor. He is a member of the National Association of Personal Financial Advisors (NAPFA) and the Financial Planning Association (FPA).

Michael recently published his first book: Independent Financial Planning: Your Ultimate Guide to Finding and Choosing the Right Financial Planner

Michael is a frequent expert contributor to financial publications, and has also been quoted in The Wall Street Journal, USA Today, Money Magazine, Kiplinger’s, BusinessWeek.com, CNNMoney.com, Consumer Reports Money Advisor, Investment News, The Bucks County Courier Times, Financial Advisor, and other periodicals;

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