The Importance of Ignoring the Noise of the Market

Last week was uncomfortable for market watchers. The Dow dropped more than 200 points one day and surged more than 200 the next. Both moves were attributed to small, seemingly random things. The International Monetary Fund cut its global forecast, and the Federal Reserve released its meeting minutes. I’ll leave it to you to figure out which one caused the drop and which one the surge.

It’s interesting to watch as people rush about in shock that the markets decided to act like markets. Instead of a slow, but steady, upward increase, they’ve been all over the place. Once again, we’re seeing words like “volatility” pop up, as though it’s a new concept.

And like a bunch of tarot card readers, investors are trying to read the signs and determine what comes next. But it’s left me wondering: Why are people so surprised? Markets, by design, tend to go up and down without warning.

Read the rest of the article on The New York Times.

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