PSA: Ignore The Media When They Cover The Market

At the start of August the market had taken on some roller coaster gyrations and the media has been flashing red alert signs to make you think it could be time to panic.

The problem is the news ignores the day to day market activity unless a big move happens and the then they attempt to connect it to some event happening that day as if they actually know the cause and effect. They actually don’t.

By focusing on the the short term, it’s easy to jump to questionable conclusions.

This is the Dow Jones Chart for Monday 8/5/24, when the market had a big drop:

So the news reported on that. Then they focused on the drop the prior two days to add some more fear to their report:

Thurs 8/1/24 – Monday 8/5/24:

Three days of declines….the month of August off to a scary start as reported in most media.

They do these things and then they wonder why people make panic filled market decisions that they say no one should do.

When you look at longer time frames, the perspective changes.

Here’s several months of market activity this year:

You can see the market has experienced two major declines earlier this year but recovered to make new all time highs.

The thing is at every major decline the news media sounds “alarms”, then ignores the market unless it makes new record lows or hits all time highs.

This should make it clear that they are not at all helpful is gauging market sentiment and it’s best to stick to your own due diligence when managing your investments or trades.