A recent survey brings word that 92% of people with more than $1 million in investable assets have not abandoned the stock market, even during the past few years of bloodletting. What this proves is that just because an action is taken by someone with plenty of money, it doesn’t necessarily follow that the action makes financial sense. Most likely, these people have a cash flow that is independent of the stock market. Maybe they’re using stock losses as tax deductions. And maybe, just maybe, they’re in the stock market due to ignorance about what else to do with their investments.
At Young Wealth, we hope all our readers have the chance, at some point in their lives, to display colossal ignorance regarding investment capital totaling more than $1 million, because that means you’ve been doing something right along the way.
And we’re not here to bash the stock market without cause, merely to point out that any resemblance between today’s stock market and the one your father and grandfather invested in, is nothing more than thin window dressing. Financial times have changed and taken your Wall Street darlings with them. We happen to not believe that the idea of waiting around for an eventual correction is sound strategy any more.
We also see a parasitic connection between the rise of the ’round-the-clock news cycle on television, radio, and the Internet, and the seemingly random price twitches the stock market has adopted as “business as usual.” An oil well in the Gulf of Mexico explodes and stocks go bouncing like Silly Putty. A tsunami hits Indonesia and stock charts look like the Tasmanian Devil’s EKG. A snail breaks wind in Kwajalein and investors take to buying and selling like frenzied clowns on crack cocaine.
This is not investing. Today’s stock market runs on worldwide static generated by business channels desperate to bump viewership at the top of the hour. Plus they need something dramatic to build tension during the interminable five minute news break that separates broker commercials. If you’re a millionnaire, more power to you; we salute what you’ve accomplished. Our fervent hope is that you learn how to stop playing with your money in stocks and learn how to actually invest it in income property.
The Young Wealth Team
Flickr / Donkey hotey