May 12, 2020 Update: No News is Better than Old News
By Paul Hynes, CFP®
With the economy getting crushed and unemployment numbers skyrocketing, I am being asked more and more, “Why in the world is the stock market going up?”
Markets around the globe have rebounded by double-digit percentage points from the low in March. In fact, one index, the tech-heavy NASDAQ 100, is positive for the year. (1)
Unemployment numbers were announced on Friday at 14.7%. (1) It was a terrible report, and will likely get worse. But wait—those numbers were from three weeks ago—and the markets were expecting them. Many economic reports are lagging in nature. Reports about changes in the economy, called Gross Domestic Product (GDP), lag by months. So, by the time they hit the news, markets have already priced them in and investors have moved on to something else.
So, it begs the question, “Why bother watching the news?” Much of it is stale. It’s often delivered in a way to raise alarm and anxiety levels. It’s certainly not designed to be calming or uplifting.
King James I of England reportedly said in 1616, “No news is better than evil news.” (2) That phrase can be interpreted several ways. One interpretation is that when most of the news out there is bad, and in this case, outdated, and we can’t do anything about it, it’s probably better not to watch it at all.
Try it for a few days. Perhaps like the markets, you’ll feel uplifted and looking forward to better days ahead.
Stay healthy. Stay hopeful. And, let’s stay in touch. One day this will be behind us. Call or email me if you’d like to discuss this or anything else. I’m here to help, any day, any time.
Paul Hynes, CFP®
(1) Chart courtesy of First Trust, LLP. www.ftportfolios.com