Stocks down on strong economic news
The top Yahoo Finance story paints a much better-than-expected picture of our economic and political future. Yet stocks are currently down a bit in the U.S. and even more internationally. What gives?
The very emotionally unsatisfying answer is that I really don't know. If stocks close lower today, the media will certainly come up with an explanation. Perhaps it will be one of the following:
-- Market down as investors don't see the right kind of job growth
-- Market down on continued European debt worries
-- Market shrugs off good news and sees more bad times ahead
The lesson: In reality, the market is a complex organism that isn't always easy to predict in hindsight. It fools the so-called strategists daily, monthly, and year after year. Remember the S&P downgrade of the US Treasuries followed by soaring Treasury prices? The annual forecasts produce constantly dismal results.
So the next time you hear an economist making a prediction, remember two things:
-- He is unlikely to be right
-- Even if he is right, you may still lose money in the market
Admit you have a prediction addiction. Just don't act on it. Have a little chuckle when you see the media explain the market results each day.
