As I write, the stock market is looking pretty sad. The President went live and offered words of encouragement (responding to our downgraded credit rating) and the market promptly rolled further downhill. It’s ugly days like this that it pays to remember some basic facts.
Every share sold is bought by someone. The old owner is thinking it’s tie to bail, the new owner is seeing a wonderful opportunity. Why the difference of opinion? Not everyone is in the same financial situation – in times of trouble, securities move from weak hands to strong hands. Not everyone has the same objective – some want income, some want capital growth. Not everyone possesses the same information. Not everyone is under the same external pressure – lots of professionals have serious career bending short term objectives.
In short, don’t make too much of it.