There is a very dangerous trend the financial news media lately. I hope that I am not the only Minnesota stock market and company 401(k) investor who notices. The best way for me to find out is to post the following question in this blog post.
Why on earth is everyone featured in the financial new television always in such a great mood?
Good news is good news and bad news is good news lately. Only in financial news TV land is that ever possible.
Large U.S. companies have missed their earnings estimates by huge margins. Several leading U.S. economic indicators have been reported below levels of any meaningful U.S. economic growth.
Recent bad news makes no difference to the financial news media. Every single financial news commentator comes up with the same conclusion. That is, “the stock market is going higher.”
The last five years of the U.S. economy have been a disaster. The historic financial crisis, government bailouts, personal bankruptcies and home foreclosures have deeply affected every generation of most U.S. families.
Economic and stock market history teaches us that at some point, bad news is going to be bad news. U.S. company profits and economic growth matter. The lack of company profits and economic growth matters even more.
When interest rates rise, bond mutual fund investors lose money. All-time high stock market levels can only be sustained if company earnings meet future expectations.
You would never know about these basic economic laws of the universe if you watched the financial news on television.
The rise of the U.S. stock markets has dominated the financial news so far in 2013. But the most important investment management event of 2013 is yet to come.
Don’t let the financial news media continue to mislead your investment management strategy. The U.S. stock and bond markets are very risky now. Make sure that you have an investment management game plan in place to protect your recent stock and bond market profits.
Ric Lager
Lager & Company, Inc.
