The Dangerous Sport of Market Watching

I love a good football game but sometimes get really annoyed with the non-stop analysis by the supposed experts who spend two weeks before any big game trying to explain all the reasons why one team or another will win. Once the game begins the sportscasters call the game in real time, and proceed to give their expert opinion on what each team is going to do next. Every play will result in a comment about what the quarterback did right or wrong, or who missed a block, or why throwing into that part of the defense was clearly a bad idea. When the hard-fought game is over, the announcers and analysts will declare a hundred reasons why the winning team won and the losing team lost.
Some years ago, I noticed that Americas obsession with sports had drifted into investing, which today is almost another spectator sport. Imagine for a moment a typical day on Wall Street. Long before the market opens the financial news feed is filled with experts predicting how the market is going to open the day and what can be expected as it progresses. I often question why anyone would care how some supposed expert thinks the market will open. I actually worry about those who do care.
Once the market opens the initial movement is often perceived as dramatic and immediately the news feed will start to say things like “market crashes,” “market soars,” etc., as if something really important is happening. Of course, these headlines will always be accompanied by a photo of some trader on Wall Street with either a forlorn or jubilant expression on his face. I am pretty sure the lifetime professional traders on Wall Street don’t walk around cheering or crying based on the market each hour, but the photos indicate otherwise.
As the day moves on, a constant stream of news items are flashed on the screen, each matching the markets most recent movements and each determined to explain why. It’s almost like watching a back and forth football game with sportscasters second guessing and over analyzing even the slightest actions of each team.
Finally the day ends, the stock market closes, and the final number flashes on the screen as a statement of victory or failure for that day. The analysts jump in again for post-game pontificating, acting as if the whole world lives and breathes by what happened on Wall Street that day and, more importantly, their analysis of it.
In my opinion, this new never-ending sport of market watching and analyzing that has become the norm has about as much real value as watching an actual sporting event. It can definitely provide entertainment for those who enjoy it, but little if any real financial benefit. If you have become addicted to the sport of market watching may I suggest a New Years Resolution for 2019 – Watch more football! It’s more enjoyable and far less dangerous to your investment accounts.