Well the media is at it again. Seems like they “gave” us Thanksgiving and then were back at it pumping fear into the markets.
Their new weapon of choice is the newest version of the “variant”.
I always find it amusing how the media brands and names situations so they can spew their influence on their viewers and listeners.
Almost every channel sounds the same.
I want to explain how this media buzz potentially can cause havoc on the markets.
The below image shows a chart of the Chicago Board Option Exchange (CBOE) Volatility Index more commonly known as the VIX.
The VIX is a real-time index that represents the expectations of the market and its strength for price changes in the near future.
Having a low VIX index means that things are going pretty steady.
If you look closely back around March 2020 when the pandemic shutdowns started the VIX went roughly from $15 to $84 in a matter of days.
This means there is a lot of uncertainty in the markets.
People don’t like uncertainty so this usually means that people are selling and prices drop in the markets.
If you look at the VIX index today we are seeing some upward pressure on the VIX but nothing like back in March 2020.
This just goes to show how fast markets can change and be manipulated by the messaging of the media.
So a couple of lessons for you:
- Do your own thinking and research outside of the mainstream media
- When you are considering your investments if this type of volatility affects your peace and state of mind you have some work to do.
In the past we used to see the quick drops in the market and real estate take longer to turn around. That often isn’t the case today with governments involvement on rent relief type programs and lockdowns.
My clients know that they can make money every year by gaining on the increases of the markets but not be affected by the slumps in the market.
If you don’t have this installed in your strategy you might be limiting the financial peace you deserve in retirement.
Let’s watch out for each other and stay positive.
Remember — It’s Your Time…