This commentary is called the “Global Market Update,” but you may have noticed that we don’t do much discussion of daily price movements in stocks and bonds. Many people wonder why.
First, we don’t think that daily price changes are particularly helpful. There aren’t many investors out there who need to know if GE went up and eighth, or Johnson & Johnson down a quarter. That kind of daily blather just adds to the noise pollution on the airwaves.
Second, short-term speculation has been part of the problem with capital markets today. Citigroup’s former CEO Charles Prince is famous for saying that “while the music is playing, you have to dance.” This drive for quarterly performance has led many corporations into financially and morally suspect transactions.
Investing is a deliberate process that requires thoughtful analysis and careful reflection. Repeating the daily market noise is no better than reading off the daily horse-racing handicap sheet.
Douglas R. Tengdin, CFA
Chief Investment Officer
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