Krikorian: How to sound like a ‘stock market expert’

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Over the years, the investment industry and financial media have convinced investors to believe that stocks move up and down for identifiable reasons. On any given day there are usually a few positive and a few negative new stories that can be spun to explain the markets movement.

Whatever direction the market happens to move, the financial media simply fills in the blank (“The stock market is up or down today because …”) with one of those positive or negative news stories to explain the markets movement. The following are examples:

“Dow Jones Opens Higher As Russia, Ukraine Hold Cease-Fire Talks Investors” — Business Daily, March 29, 2022

“Stocks plunge as rising oil, wheat prices shake market” — Yahoo Finance, March 7, 2022

What if it’s a slow news day without any major news events? How do you come up with a reason to explain the markets’ movements? Since you are portrayed as an expert on the market, you have to say something. You can’t admit the truth and say “you don’t know.”

Not to worry, just do what the “real stock market experts” do.

There are all sorts of clichés, explanations, and catch-phrases the investment industry uses to describe the stock market. Many of these explanations have been used for decades. There isn’t a day that goes by that someone on CNBC or any of the other cable business channels uses one of these ridiculous phrases to describe the stock markets current or future movements.

The following are few of my personal favorites.

“Stocks are down on profit-taking”

“Stocks are up on bargain-hunting”

“The market is taking a breather”

“We’re cautiously optimistic”

“We’re taking a wait-and-see approach”

“We’re waiting for more certainty”

“There’s lots of cash sitting on the sidelines

“The smart money is…”

“Time to take some money off the table”

“It’s already factored into the market”

Translation to all of the above  – “I haven’t got a clue, but I have to say something”.

Contrary to what investors would like to believe, it is not the financial media’s job to help investors achieve their financial goals. It’s their job to keep you watching.

These explanations have unfortunately become so common that they are simply accepted as fact. When was the last time you ever heard anyone on CNBC ask one of their guests “How do you know this is what caused the stock market to move?” “What proof do you have?”

The financial media will never hold themselves and or their so called “stock market experts” accountable because accountability would only ruin the game.

Martin Krikorian, is President of Capital Wealth Management, a registered investment adviser providing “fee-only” investment management services located at 9 Billerica Road, Chelmsford. To schedule a free, no-obligation initial consultation call, (978) 244-9254 or email info@capitalwealthmngt.com