Scary Markets: The Brexit Edition (aka “The sky is falling!”)

On Friday June 24th 2016 the financial markets fell into panic as if the world were coming to an end. It seems every year CNN, BNN, CBS, CBC etc. are sending us amazing signals that multiplies our stress. And despite the market recovery, every time, they persist in provoking us! Why?

Simple answer, if it’s bloody, it sells. Sells newspapers, advertising and today’s expert telling us where we should be running.

I must admit that the Brexit vote did catch a lot of people by surprise. As a matter of fact, the world’s best source for what’s going to happen got it technically wrong. Who are these reliable, mostly-correct individuals and companies? The London bookies. So if the bookies can’t get it correct, who can?

I’ve been in the financial business for 45 years now. But I’m late to the funds industry—only 20-25 years. How many times have I seen the “Scary Markets” headline? It’s like Chicken Little only we fall for it every time.

This one was different in one respect. I’m writing this the Wednesday after Brexit and no clients have phoned or e-mailed with a concern or feeling of panic… at least not yet.

As you are probably aware I really have two major recommendations when it comes to understanding the markets.

First, don’t watch all the news. They are just trying to scare you into watching more news. I don’t know if this is true or not, but in my opinion the news is filled with 97% bad news and once in a while a good news story about a kid who raised $500 by selling lemonade for a family of refugees.

I know we can’t all be Pollyannas (If you haven’t seen the movie watch it, you’ll be glad) but do we really want to be the Grinch (before he got turned)? Can you imagine what it looked like for our ancestors in the middle of the 2 Great Wars? How about Napoleon or Hannibal (not Lecter)?

My world view is just the opposite of all the news feeds. I think there is 97% good news. The other 3% just get all the press!

Second, I’ve recommended this book in a previous post and I have to recommend it again. If you haven’t read it, get a copy and give it a good read. I’ve already read my copy three times. The book, “The Behavior Gap” by Carl Richards shares a similar philosophy to me.  Below it a sketch from his book which is self-explanatory.

Finally, below you’ll see “65 Excuses for Not Investing.” It shows from 1950 to 2015 and now for 2016, we can add Brexit to the list!

– Michael.

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Michael’s Book Shelf: So good, I recommend reading it twice. Get it from Amazon.ca or your local book shop.

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