One of our responsibilities as an investment advisor is to help you put market news in its proper perspective, especially when the media is reporting global market corrections in the wake of political events.

If you’re reading the popular press, you’re seeing a lot of storm and fury having to do with the election, Russia, Brexit, Trump’s first 100 days. As the popular media scrambles to explain the unexplainable – what is going on in the markets at the moment and how long it’s going to last – we thought we’d share a headline of our own:

“The stock market is a giant distraction to the business of investing.”

So said Vanguard founder John Bogle in his 2007 classic, “The Little Book of Common Sense Investing.”
These are timeless words to invest by, as is Bogle’s deeper explanation of them:

“The expectations market is about speculation. The real market is about investing. The only logical conclusion: the stock market is a giant distraction that causes investors to focus on transitory and volatile investment expectations rather than on what is really important – the gradual accumulation of the returns earned by corporate business.”

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Avoiding Biased Decision Making When you hear something repeated enough times, doubts may start to slip away, and eventually it’s accepted as a fact. Believing the things that are imbedded in our psyche because we’ve heard them before is known as an “availability bias.”1 This may partially explain why blue-chip stocks are popular, as more…

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