Review & Outlook

Our take on the investing, financial, & economic themes of the day

Reflections on Today’s Global Market Sell Off

24 August, 2015 by Mark O'Brien in Commentary

The managing of money is never easy.  That’s because the future is never clear, and markets are often fickle and counterintuitive, even in the best of times.

But in times of financial panic, such as we are in, or appear to be in, managing money becomes especially difficult and that is not so much because of stocks and bonds and unfolding events but because of our human natures.

In a career that has survived bear markets and panics in 1975, 1987, 2000 and 2008, to name just a few, I can say that the best thing to do is not to follow the news and even less to act on it.  Instead, concentrate on managing oneself, especially one’s fear of the unknown, which tends to be hyped up by the financial media.  If one is not disciplined, it is easy to imagine silly things.

The Dow Jones industrial average just opened down 900 points.  Minutes later, as I write, it is down 500 points.  If one were to sell a stock, or buy a stock, the price one would get on execution is not the price one sees now.  The better course is to err on the side of patience.  No self-inflicted wounds please.

It is important to remember that the stock market is a wonderful wealth-creating machine.  But it is important also to remember that the price of admissions to this wonderful wealth –creating machine is short-term volatility and even, from time to time, panics.  Also remember that our portfolios are constructed to withstand panics and volatility.  There is nothing to do now, because we have already done it.

Lastly we at O’Brien Greene & Co are watching every minute so you, our clients, don’t have to.  But if you want to talk, please feel free to call us at the office (610-891-7880).