Here we go again. Markets are on another wild ride this week. Should we really be surprised by this? After all, don’t markets always go up and down on a daily basis. The news and the media play up the volatility on both sides and therefore, watching the news can be a little overwhelming especially when the markets are going down. Here are a couple of headlines:
Growing uncertainty fuels wild ride on markets from the Globe and Mail
Closing Bell: U.S. jobs, EU debt cast shadow over markets from the National Post
Headlines are designed to attract your attention so you read the contents of the article. But sometimes all this attention is really just something I call ‘noise’ and I compare it to the empty sound you hear when you change radio stations manually (not that anyone does that anymore). There was a time when you had to scroll through ‘noise’ to get from one radio station to another.
Here’s a great video that I think represents the day to day noise of the stock market. Thanks to Rob Carrick for sharing this video through his Personal Reader series –
It’s now been many years since the Black Monday of 2008 and the perspective I share is this: Think about your life and the daily routines you have like taking the kids to school or eating dinner with your family or having a coffee break at work or going camping for the long weekend or going to the gym for a workout or sitting in the back yard and reading a book or even watching your favorite TV program. Has all this stock market volatility really changed your life?
When I finished watching the video and think back to my life over the past three years, that volatility did not change my life at all. I still was a dad of 4 kids and husband to my wife. I still wrote my articles, did my presentations. I still had my endless list of projects around the house. I still tuned in to Netfilx from time to time to watch a move. I still paid the bills. I still engaged in my regular routines in life.
Did the stock market volatility change your day to day life?
Retirees have to watch the volatility
The good news for me, is the stock market did not affect my day to day life mostly because I do not depend on my portfolio to live and pay the bills. Unfortunately for some others, the stock market volatility is affecting their day to day lives because they do rely on income from their investments. Volatile markets can affect retirees the hardest. Anyone who is selling shares to support an income from their portfolio needs to rethink that strategy when exposed to stock market volatility. If you want to know why, check out my post on why retirees need to be more conservative with their portfolios.
So as the news and the media play up the movements of the markets, especially on days of big moves, just ask yourself this question . . . Does it really affect your current day to day life?