This morning, while on a 12-minute phone call two diametrically opposing headlines appeared on CNBC. As the market opened the headline read "Global stocks plunge as selloff spreads around the world" with an image depicting people jumping out of an airplane. This representation gives investors the view that the sky is falling and markets are dropping substantially. As an investor, one might make an irrational decision based on this scary picture. Emotions tend to get the best of people.
Minutes later…….the headline now reads "Market picks up momentum and the DOW is positive". The image now depicts a bull. Seemingly to say, the bull is back.
Ask yourself, which minute would you prefer to see as a headline?
In the media, if it bleeds it leads. Holy smokes all of these headlines happened in a span of 12 minutes!!! Talk about being on a roller coaster ride.
A disciplined approach to investing can take the emotion out of investing. It allows us to recognize all these headlines are “background noise.” Making sure you are properly diversified along with being disciplined will reduce the panic.