About the Sagging Market

The New York Stock Exchange, the world's large...

Image via Wikipedia

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.

Advertisements

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: