Don’t Fall Victim to Daily Headlines, Financial Expert Says [AUDIO]
The threat of a government shutdown lingers as Congress continues to fight over the federal budget, which is moving markets lower.
The Dow Jones Industrial Average fell for a fifth straight day on Wednesday, its longest slide since last month. But, Ken Kamen, President of Mercadien Asset Management is urging investors not to let daily headlines drive their fears.
“We’re starting to get back into the cycle where headlines are going to start to drive the market. Congress is getting dysfunctional again, there are rumors of a shutdown over a budget fight. But, we’ve been through this before. At the end of the day, Congress will wind up figuring out a way to settle something, to make some sort of extension to make something happen and quell fears,” said Kamen. “I always tell investors that they have to have the mental fortitude to look past the headlines because things always have a way of working out over the long run.”
Investing is a long-term proposition.
“Headline driven market moves are really just short term blips that smooth out when you look back over the course of a year,” said Kamen. “Look at 2011. The government was talking of shutting down while fighting over the debt ceiling. Investors may be fearing that again, but the government was able to figure it out and it was settled. I tell people look at what happened then and we’re still sitting on market highs just two years later. So, these things are not world-ending events, they’re just road bumps along the way to long-term investing results.”
“The media covers volatility, the media does not cover markets. The media covers the day to day noise that happens as laws, rules, regulations and corporate earnings come out. But, over time, markets move because of the growth of economies and the growth of companies and that’s not what’s reflected in the day to day news that we see in the headlines,” said Kamen.