Be Wary of Media Pundits When It Comes to Investing

QUESTION:

I’m getting nervous. With all this volatility, many in the media are saying that this 9-year-old bull market might be coming to a close and a recession is not far off. What should I do?

ANSWER:

There is always noise. There are always perma-bulls telling you the market will go higher, and there are always perma-bears telling you the world is about to end. There are also people telling you to buy gold or sell gold, buy stocks or sell stocks.

Who should you trust? Start by asking what is their motivation or what are they selling? Many of these gurus are actually selling newsletters, and having a good story is more important than being correct. The louder and more dramatic the story — right or wrong — the more newsletters they can sell.

The world and the market are too dynamic for any expert to be right all the time. However, expert analysis that focuses on generating results as opposed to subscriptions can be trusted. At AMG, our only dog in the hunt is our client’s success. We believe the economy is solid, and that the stock market is simply correcting itself and returning to normalcy after two years of booming stock prices. That’s based on our own research and analysis.