The stock market is in decline. So who cares?
This is a moment for investors to remind themselves not to panic, says Lisa Kramer, a professor at the University of Toronto’s Rotman School of Management who studies the interplay between human emotion and markets. “Fear doesn’t drive good decision making,” she says. “If you look at your portfolio every day or multiple times a day, it will just look more volatile.” With that in mind, Prof. Kramer has started to minimize her consumption of market and economic news. (In other words, read this story, but then step away from the screen.)
Could all the recession talk actually be a sign we’re reaching a bottom? After all, when even Cardi B is weighing in on the business cycle, surely that means pessimism is reaching a saturation point. Perhaps, says Mr. Atwater, but the mood in markets still feels more like “impatience rather than capitulation.” For his part, Mr. Grantham argues a bottom won’t come until investors are “terrified” to own stocks.
The bears, meanwhile, continue to accumulate data points they say prove their case: inventory pileups at retailers, weakening corporate profit outlooks, plunging auto sales. And as of Friday, the mood in America reached a devastating new low: The University of Michigan’s consumer sentiment index fell to 50.8, a level not seen since the gauge was created in the1950s.
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Why so negative?
The two main reasons are
1. Covid 19
2. Putin's prolonged and devastating attack on the Ukraine...without his desired result.
Both are no longer believed to be serious threats and the stock markets will recover. N.J.R.
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