OK, a major Wall Street firm came out recently and predicted a fifteen percent correction in the market. What should you do? Well, as Your Survival Guy, I continue to stick with my investing plan regardless of what Wall Street predicts. As you know, predictions are cheap. Why? Because more often than not, these predictions are reversed when their crystal balls turn out to be not so crystal clear. So what’s the point? The point of the predictions is to instill fear.
Nothing gets the phone ringing like the prediction of a market correction, especially one of this magnitude. Ring, ring, ring goes Bob the Broker’s phone. “Hi Bob, what’s this I hear about you guys calling for a correction? What do you think Bob? How are ‘we’ doing Bob?” asks the client.
“We” is not on Bob’s mind at that specific moment—especially when he’s planning his next trip to play golf at St. Andrews. But the prediction has served its purpose. It has the phones ringing, and gives Bob a chance to sell product. That’s what brokers do, you see, they sell clients product that’s sitting in their firm’s inventory. Like a car salesman selling you something off the lot. It might not be the model you’re looking for, but they’ve already got it on the lot, so it’s the one you’re getting. “I’ve got something you might be interested in,” Bob says. After all, he’s got business class airfare to pay for.
Action Line: My RAGE Gauge is at full tilt and remains so until further notice. Don’t be fooled by cheap predictions. Even a blind squirrel finds a nut every now and then. Keep on task. If you need help let’s talk. But only if you’re serious. I’m not in the prediction business.
E.J. Smith - Your Survival Guy
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