304 North Cardinal St.
Dorchester Center, MA 02124
Stock market down today?
Wanna know why? I can tell you exactly why and, more importantly, what you should do about it.
The stock market is down today cuz more people are selling stocks than buying stocks. (Stick with me here, I’m not saying that to be an a-hole.)
Maybe people got spooked by economic data like unemployment numbers or GDP or whatever other reports economists pump out.
Maybe a trade or tariff war broke out. Or a real war did.
Maybe a few key companies reported bad quarters which spooked investors.
Whatever the case, the financial news media will be quick to point to these things and tell you this event or that report is why the stock market is down today. Truth is, they’re largely full of it.
Their job is to get you to tune in and hang on their every word. No matter how much bullshyt they spew.
The truth is that when the stock market goes down, or up, there are lots of factors that cause it. The news media will just latch on to the most sensational or most obvious reason and tout that as why the stock market is falling.
If they actually reporting things accurately, they’d say things like “The stock market dropped today because…”
… Some large institutional investors sold a bunch of stock to lock in profits
… Automated trading algorithms triggered a big sell-off today
… Shyt happens. Some days the market goes up. Some days it goes down. And today was one of those days when it went down.
Sometimes, the stock market will drop but your portfolio will increase in value.
Well, cuz the “stock market” (or, more accurately, the stock indexes like the DJIA and S&P 500 that people follow to gauge how the market is doing) is based on the prices of a bucket of stocks.
Even on days the stock market goes down, there are stocks that rise in value. And vice versa.
So if you have a portfolio of individual stocks, your stocks may very well be up even if the market, overall, is down.
If you own an ETF that tracks one an index then, well, if the market/index goes down, then your nest egg is gonna go down in value along with it.
The most important question when the stock market goes down is:
What should you do about it?
And the simple answer to that is…
… absolutely NOTHING!
In fact the WORST thing you can do is panic and start selling off a bunch of your stocks, ETFs or mutual funds.
For most investors, however, if the stock market drops you should go grab a beer or watch a movie or just otherwise go about your normal business.
The stock market goes down. Sometimes a lot. But it has always come back up again over time.
So unless you’re retiring tomorrow, don’t sweat it.