What's your financial goal? It's an important question. You've self-selected into this investment-related bit of content so you probably have some reason. Hopefully you're saving a little money every month and looking to make smart stock selections. But that's not enough. You need a goal. Without a specific target you're just a hobo with a log-in ID. So I'll ask again: What's your investing goal?
While you're thinking I'll tell you stocks fell yesterday after the European Central Bank said it won't accept Greek bonds as loan collateral. The news took about 1% out of the S&P 500 in less than ten minutes near the close of trading on Wednesday. That's about $220 billion in market value up in smoke. For the sake of comparison the entire GDP of Greece in 2013 was under $270 billion.
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So, a value equal to the entire annual economic output of Greece disappeared in an instant because... well who knows? It's not that stocks were right at 3:30p and wrong at 3:45p. It's that the news had slightly changed and the knee jerk reaction of the computers that make all the marginal trading decisions on Wall Street was to take stocks down 1%.
Which brings us back to you. Unless you're investing goal is to marry into American royalty and trade Greek debt derivatives, that is to say unless you yourself are literally Chelsea Clinton's husband or one of his business partners, the ECB news changed literally nothing in your life. Anyone telling you otherwise is lying, dumb or selling you something.
It's easy to get wrapped up in this news flow but you have to keep some perspective. Never forget that the financial news machine is set up to spew information at you 24/7/365. That doesn't mean you have to listen to it. Watch earnings. Pay attention to the economy but don't make investment decisions with ten minutes to go in the trading day based on something the ECB said. Do that and the only people who will end up retiring with your money are your brokers. That might be the only investment "tip" you'll ever hear me give without any qualifiers whatsoever.
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