photo credit: Margaret Anne Clarke Creative Commons License
OK, Question for you: Under what conditions do you start to worry about your portfolio?
Sometimes I think reading the financial pages is like reading about which food causes cancer. When I was a kid, anything fake-red, like raspberry jello, was out. Then it was OK after all. Then this, then that … it’s crazy making! So now I just try to eat as “clean” of food as I can (organic, free range, and increasingly less packaged stuff) and don’t worry about what the latest findings are.
As much as I encourage us average Joe/ette Canadians to read the financial papers, I’ve read so many prognostications that shift every few weeks, I’m coming to a similar conclusion about high finance as well.
In today’s Financial Post, for example, I read this:
The swagger in equity markets over the past month evaporated Wednesday as investors in stocks finally succumbed to mounting worries about the economic recovery…
In Toronto, the S&P/TSX composite index fell 256.08 points, or 2.2%, to 11,582.21, its lowest level this month. In the United States, the S&P 500 tumbled 31.59 points, or 2.8%, to close at 1,089.47.
If my entire portfolio drops 2% I do indeed take note. But I don’t make any conclusions about a sea-change in market sentiment. And I don’t feel particularly anxious. I do get anxious if any given company I own has bad news or declining sales. I would get somewhat anxious if there was … maybe about a 5 or 6% overall drop. And I’d freak at about 10-12%. But 2%? I’ll sleep, I guess!
Am I naive? What conditions cause you to stress?