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You Are Not Alone

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I have seen a lot of John Hancock investing commercials on television recently.

I have never dealt personally or professionally with John Hancock so cannot opine on if they are a great firm or the Satans of insurance. But they sure make good commercials.

What do I mean? 

“You Are Not Alone” – Living Room

I hear these exact comments from clients and associates every single day.

The market is up, then it is down, then it is sideways. And every day the talking heads in the media have a perfectly logical explanation as to why what just occurred makes perfect sense.

A prime example is Facebook. Prior to the initial public offering (IPO), I kept reading about how the price would rise; how investors could snap up shares in the secondary market as the IPO was fully subscribed; why Facebook’s business model had a great future; and so on.

A month later, I keep reading how Facebook should be valued at around $20 per share (or in one analysis, even $6); investor lawsuits are in the works; that Mark Zuckerberg should be brought up on charges.

All the analysis both before and after the IPO made (some) sense, but who is correct? Is Facebook worth $50 or $20 or something else? And what is even scarier is that often the folks valuing it at $50 are the same folks saying a month later it is worth $20 or less. Oh yeah, and by “folks” I mean finance professionals.

It is enough to reach for the Tylenol and/or buy a bigger mattress. Or, in my world, buy shares in Johnson & Johnson and Sealy (appropriately, Sealy’s stock symbol is ZZ).


“You Are Not Alone” – Bedroom

Another great little commercial that accurately reflects more of my conversations with clients.

“You can’t let it get to you, it’s all just noise.”

So, so true. As I wrote above, one day the markets are up and there are plausible reasons why. The next they are down and there are good reasons why. Hindsight is always 20-20. It is forecasting the future that is less simple.

Try to avoid the daily minutia from talking heads on the financial news network. Focus on general trends and longer term movements.

If you do, I believe that you enjoy better long run portfolio performance. You will also sleep better at night.