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Attributing motives to facts

January 17, 2013

This is a pet peeve of mine.  News reporters often do this and I hate it.

“The DOW gained x number of points today as renewed confidence in the government to handle the fiscal cliff issues surged.”

Really?  That was why?  There weren’t any other factors involved?  No timing issues related to trading at the beginning of a new year or tax season?  Just that confidence was renewed in the government?

A professional news reporter wouldn’t do such things.  Even though I’m just a plebe, I can tell that these are setups.  Stocks, more than anything else, get me fired up because I used to have some familiarity with them.  Having sat down with millionaires who were contemplating strategies for selling stocks, I can tell you that I never once heard someone say something like that was their motivation.  Kids going to college, planning for a wedding, change in employment status, but never “hey, the government looks like they’ve got their crap together, I’m going to go ahead and put some more money in the market”.

In fact, the number one reason that people I spoke to were selling stocks or mutual funds was because they were being FORCED to do so by the government.  Yes, you read that right.  If one is wealthy, there has to be a plan in place to sell off assets once they hit 71 (I believe – it’s been over 10 years since I’ve been in that market.)

I hope you’re fairly skeptical about the motives attributed to investors as you hear reports of such things.  It’s healthy to take such attributions with a HUGE grain of salt.  It also says a lot about your news source.  If you hear things like this, maybe you should find some other sources for news.

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