Opposite Day(s)

The coronavirus is spreading across the continents.  The stock market and interest rates are tanking.  This is a good time for some perspective (on the markets, not on the virus).....

When stocks decline sharply, the steady flow of negative news reports drives many people to flee the markets out of fear -- and miss out on potential gains as financial markets inevitably regain their strength over the next few months and years.

Right now, we're actually going through the third(!) stock market drop of 10% or more in the past 13 months.  The other times, as well as all of the other times before that, the markets recovered and went on to new highs.  Yet people are still fearful.

So how do you keep the fear from prevailing?

Simple.  Long-term investors should do the opposite of what they want to do.  That is, instead of watching the markets and reacting, they should ignore the markets and do nothing.

It's OK to not check your investment / 401k / 403b account balance when the market is falling.  It’s also OK to not watch or listen to financial news.  In fact, turning off the financial news is the smartest anyone can do if it keeps them from making mistakes based on emotional decisions.

The real contrarians will actually do something -- they'll buy into the falling markets, and of course, sell into the gaining ones.  They're the smart ones.

Be smart.  Be brave.  Be opposite.

Caucus Of Death

Disaster.  Debacle.  Embarrassment.  Fiasco.

You may think I'm talking about the current presidential administration.  While those words definitely all fit that, I'm actually referring to another political item:  The 2020 Iowa Caucuses.

This isn't going to be a review of what went wrong. [Technology.]  Nor will it be a prediction about the future of Iowa's first-in-the-nation presidential election year event.  [Terminal.]  It's to clarify something the national media doesn't cover:

Most Iowans do not give a damn about preserving their first-in-the-nation caucus status.

The only folks who really ever cared were / are mainly political activists and wonks, who constitute a very small percentage of the population.  I'll also throw in the hotel and restaurant industry and a few other small main street businesses, which enjoyed higher sales from all of the extra people roaming the state off and on for months.

Yay for the economic growth of a few, on a quadrennial basis.

So for anyone who thinks Iowans will be universally sad to see the caucuses abandoned, no worries!  We're actually looking forward to having fewer political commercials bombard us on both traditional and digital media platforms.  We're looking forward to having more elbow room at the Iowa State Fair.  We're looking forward to the calm.

The Iowa caucuses have always been a slightly goofy anachronism in the privacy-challenged digital age.  It may well be time for them to die.

In which case, not that many Iowans will be crying at the funeral.