The Media: If It Bleeds It Leads

With spring finally here, I have a bit of a spring in my step. With a bit of a light-hearted, spring-time flair, I thought I'd share a clip from Alonzo Bodden. Alonzo has a comedy special airing on Showtime.

The clip below talks about the 'Fear of Disease.' In today's world, there's always a crisis going on somewhere--financial crises included. At the potential cost of our peace of mind, they are usually showing up in our newspapers, television news, and other media outlets. Remember to keep things in perspective and don't get too caught up in the crises du jour.

Think positively. Think Spring. Laugh a little.

To Your Prosperity,

Kevin Kroskey, CFP, MBA

The Cruel Psychology of the 1,000-Point Drop

If you don't already read Jason Zweig's regular column in the Wall Street Journal, you should. He is one of the few financial journalists worth reading. His recent article on the psychology of the recent market drop is rational and instructive. ==== Click here to read the article in it's entirety: http://blogs.wsj.com/moneybeat/2015/08/24/the-cruel-psychology-of-the-1000-point-drop/ See below for a snippet: Experiments have shown , for instance, that people believe cancer is riskier when they are told that it kills “1,286 out of 10,000 people” than when they hear that it kills “24.14 out of 100 people.” Hearing “1,286” immediately brings a large number of victims to mind, while “24.14” is simply a much smaller number. To notice that the first number is less than 13%, while the second is more than 24%, you have to focus on the denominators of the fractions and do some quick division. But your emotions will likely hijack your brain long before you get to that poi...

Last Week Was Not One To Miss

Last week the Dow rose 7.3% last week amid earnings reports from many companies, as reported in the Wall Street Journal ( http://online.wsj.com/article/SB124782681174757379.html ). For most companies, it's not like the reports were necessarily good. It was that the news was not as bad as expected . This rapid rise in the market occurred despite poor economic news, including rising unemployment now predicted to go north of 10%. To many investors, this seems counter-intuitive: poor economic news and declining earnings reports compared to the same time last year yet the market goes up markedly. How come? It's quite simple actually. The market looks forward and reacts to new and unknowable information . So even though the news was bad, much of it was not as bad as expected . Thus the new information positively changed market expectations and prices adjusted upward. Unless you can predict the future, as investors we must stay invested through good times and bad to ensure we experien...

Are We All Socialists Now: Government Intervention and Stock Market Returns

As a recent Newsweek cover asked, "Are We All Socialists Now?" And if so, should U.S. equity investors be alarmed by the prospect of greater government intervention in the economy? Historical data looking at this very question may be surprising to you. Click the link below to watch a short 6 minute video, which provides some objective comparisons of stock market returns from the more free-market system in the U.S. compared to the returns from more interventionist governments from around the world. The evidence suggests that government intervention is just one factor among many affecting stock returns, and that an above-average degree of intervention is not necessarily associated with below-average returns. https://admin.acrobat.com/_a772887163/governmentinterventionandstockreturns/ To Your Prosperity ~ Kevin Kroskey

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