Why is the press so negative on the markets?
Because that is what the press does. Last year (2013) has been a pretty good year for equity investors. It has been a much better year for market timers that are engaged in active portfolio management. As I have discussed in previous articles, legitimate market timing of deciding what assets to own and what assets to be short at different stages of economic and market conditions is what a trader does.
The TV and newspapers coverage in the markets are more focused on political and controversial stories than on the goal of the equity markets which is to make money. The fear and greed of the masses of attempting to make easy money by buying a stock and watching their money grow drives the markets. The press will hail the one month decline in unemployment rate from 6.1% to 6% without any meaningful understanding of full employment. Other liberal press will continue to focus on job loss during the most recent administration as negative to the economy and stocks. The large numbers thrown around by the press on our trillion dollar deficits fails to take into consideration the trillion dollar economy.
Anticipating the markets and measuring the true greed and fear of investors is full time job. It is critical to watch not only what people are saying, but what they are doing which may be different. The press criticisms are there to get you to buy their papers and turn on the nightly news. What are they to say? The banks interest fixing scandal that is currently going on would have tanked the market in 2009. Today, the cash on the sidelines is still placing more money into equities.
The press will always be critical of the political and economic environment. Trading for profit requires a plan, discipline, and risk management. Leave the story rhetoric to the press and stay with your plan.