American business magnate Warren Buffett and Vanguard Group founder John Bogle have told us time and again: When people see rising and falling prices — the normal, unceasing action of the stock market trying to price thousands of assets in real time — they feel a need to react, to do something. The fact is they should do nothing at all. Volatility is normal and should be utterly ignored.
In fact, Bogle told MarketWatch on June 29: “Don’t pay a lot of attention to the volatility in the marketplace. All these noises and jumping up and down along the way are really just emotions that confuse you.” So why don’t more investors listen to this advice?
Watch as Bryan Beatty sheds light on investor behavior and helps answer the following questions:
1. After 6 years in which the US stock market is up over 200% are we in a stock bubble?
2. What are people doing in terms of behavior when it comes to investing the stock market?
3. Can you explain more about the tendency investors to focus on the wrong information when it comes to investing?
4. What is the most important thing people fail to consider in terms of investing?
5. Why are average investors almost always wrong?
The original segment appeared on News Channel 8’s Let’s Talk Live.