Broker Check

Petsis Posts: Why I watch the daily market news & talk programs and why (maybe) you shouldn’t…

January 25, 2023

The upstairs offices of Anthony Petsis and Associates are quite mysterious. We do not have a client meeting area upstairs, so the offices are reserved for the exclusive use of our advisors Tony, Alex and Heidi.

As much as Tony and Alex would like to have a humidity-controlled Cigar lounge, alas; upstairs is reserved for focused work time. Besides the clicking of keyboards, answering emails, and the chatter of telephone calls the upstairs atmosphere is filled with the banter from your favorite daily market news and talk programs. 

Maybe the fact that we watch these daily market shows is not so much of a surprise. You expect your advisors to be informed with the latest comings and goings of the markets, right? Would it surprise you to know that the main reason that we are watching the shows is not to refine our investing techniques or gather market research? (We have unbiased, paid research that is apart of our investment process for that!)

In fact, the main reason we watch CNBC Squawk, FoxBusiness for your favorite daily market new show is because we want to know what some of you, our clients and potential clients, are watching. And we want to protect you from the perilous investment decisions these daily shows can lead you towards. The most popular one now a days seems to be “timing the market.”

Step back for a second and consider that Wall Street makes billions of dollars on transactions every year. Consider then, that these daily market shows encourage frequent trading, where Wall Street is picking up a couple of cents (or dollars) on each end of the trade. This programing can create an environment that in our opinion lines the pockets of Wall Street firms.  “Get out of equities”, “rotate into defensive stocks” “move to treasuries as a safe haven “and then “get back in when things look better (spoken in “code” such as when the 200-day moving average crosses or some other “arbitrary” technical analysis point)” are all euphemisms for what amounts to terrible investing mistakes…stated simply - buy high, sell low and try to time the market twice- out AND back in.

So maybe the full incentives of many of these daily talk show personalities are not disclosed. While part of their job is entertainment, in our opinion the main part of the job is driving home the narrative that you need to be active in your trading and portfolio management to somehow take advantage of market conditions on any given day, or else you are somehow missing out. That if you aren’t making a trade in a down or rising market in your portfolio that you are somehow inept or missing out on potential returns...For most investors, a monthly summary (like we provide via email, free of conflicts...) would suffice. However, that’s not going to generate the daily advertising revenue that networks are looking for nor the trade volume that wall street seeks.

It literally makes me sick, knowing that this “advice” ruins hard-working Americans retirement savings by what amounts to sowing irrational exuberance in rising markets and panicked fear of falling markets and terrible investment decisions that follow: How many times do we see a client come in, after a market run up, 100% in cash, asking me “what do I do? The market news seemed so bad (last year) so I got out and never got back in.” THAT is what we are talking about, a real-life situation that had a huge negative impact on a client.  

Many of us who have become successful investors know that the consistency of investing is important. Predicting the market is a fool’s errand. As a firm we favor preparation over prediction. Time in the market versus timing the market.

There is a solution to consider: Hire an advisor to create a diversified portfolio of investments that the match to your goals and objectives. Have he or she dovetail your investment portfolio directly into your financial and retirement plan. Our financial planning clients know that they have a plan for when the market goes down, and that plan does not involve panicked selling out of equities.

So next time you’re in the office, know that your advisors are sitting upstairs working hard on your financial plan, getting back to you on life’s important financial questions and watching those pesky daily programs intently to protect our clients from a potentially bad investing decision.