How the Market Works
Market Crash: Giggling in a Pub
Posted by kdadmin on September 4th, 2015.
Imagine that you’re an investment advisor. That you manage money for a living. And now that one of the worst months in four years has passed, it’s time to send performance reports out to your clients. Yikes.
Take a look at that graph above. Which of the lines would you hope is your performance, and which would you hope is the benchmark?
Imagine what you would say in each scenario.
- If the blue line was your performance, you’d be spewing the typical market place rhetoric of those who got caught with their pants down. You’d blather on about “investing for the long term, staying put, or that short term volatility is normal.” And you’d hope that your clients couldn’t do the basic math to figure out how much they’d actually lost.
- If the shaded green area was your performance, you’d be drinking wine and giggling maniacally, as you write this, even when everybody else in the London coffee shop is looking at you … You’d try to stop, but you wouldn’t be able to. Even when the tears started to run down your face. Then, you’d do a Homer Simpson style, “Woo Hoo!”and order some whiskey this time. You might even be wringing your hands with a predatory grin on your face and your tongue hanging out.
Dunno. Just a thought. 🙂