Everyday does not go without the doom and gloom behind news media centralized on our nations financial conditions. I cannot tell you how many times I heard the term fiscal cliff in a span of 4 months and still counting, I am running out of fingers and toes. I ask myself why does all this doom and gloom crappy news sell or for that matter why do people want to hear it? I even got a random email from a coworker who could care less about his finances or being responsible with money, asking me what I thought of the fiscal cliff. I gave my explanation to him that it’s all hoopla based primarily on the elections. But that still doesn’t even begin to answer the question; why is there so much doom and gloom coming from all the media outlets and why do people care to hear it.
Stocks and Bonds
Every day I am hearing or reading how stocks should not be performing this well based on the condition of our economy. In addition to this supposed market correction arriving in who knows when, I read all the time how people are switching their portfolios to cash to hedge against risk. I get it now, you are all sheep following what the media will tell you to do is the only conclusion that I have adapted during these times.
People stocks are meant to be long-term assets that go up and down driven by fear and greed, the sooner you accept this as standard business the better off you will be. If you are nearing retirement then by all means protect your ass, but those of you not please stop following the mindless herds.
As for bonds every day I hear how we are in a bond bubble that will soon pop. If it pops and prices drop, then just buy more while they are cheap and you will see even bigger returns when stocks eventually pop as well. Why is it that after the housing crisis every other component of the financial markets has a balloon around it? First it was gold, then it shifted to oil, then it was bonds, and now it is stocks. People just keep doing what you do invest here and there, and stop listening to all the media talk, which goes nowhere.
Taxes
The government had to raise taxes because we are near a recession due to many unemployed people , due to high debt affecting our GDP, due to a stalled housing recovery. If people do not have jobs then how can they sustain the economy by spending money which generates taxes? It can’t be done so the only other option the government has is to increase taxes back to 2006 levels. This is not rocket science it just takes a few classes on economics to understand all the issues behind our Nations GDP. Most of you do not know that 70% of our Gross Domestic Product comes from consumer spending and if that takes a big hit obviously we will not see growth. Just like if you reduce income to the tune of 50%, you will have a rough time adjusting to that decrease. The government can’t go out and get a second job delivering pizza in Israel, they have to increase taxes.
Conclusion
Take every day as they come, do not try to outsmart the markets because you will lose in the long run. Do not listen or read to all the negative news spewing from the mouths and fingers of media persons. Stay on track with your investing strategies, buy low costing mutual funds with at least 10 years trading history. Diversify by buying different sectors of the markets and watch the funds overall expenses. This will give you a greater peace of mind and keep you as safe as can be with an uncontrollable component within this country. (The Economy/ The Markets)
Comment if you know how to block all the doom and gloom behind news media?
Rich Uncle EL
