The Biggest Market Myth

Particularly in times of extreme volatility, pundits come out of the woodwork to “explain” to the rest of us the reasons underlying the rise or fall of the stock market. For example, how many times have you seen articles attributing recent market declines to a drop in oil prices?

I suspect if you polled investors, many would believe there is a direct relationship between the price of oil and the stock market. This belief is fueled by market commentators like Jim Cramer. In an article published in December 2014, Cramer “explains” how lower oil prices affect U.S. markets. According to him, the S&P 500 goes down every time oil prices go down.

Read the rest of the article at The Huffington Post.