No News is Good News

When I was eleven years old I began to deliver newspapers. For the first couple of months I delivered a morning paper after my older brother got a real job and so I got up early and helped his twin. Then he got a real job. Fortunately, I was offered an afternoon newspaper route. For me, it was as close to perfect as a job could be. I did it after school, it took a little over an hour and I made a couple of dollars per month for every subscriber. In my mind I was rich. I opened my own savings account and with every deposit I was able to see my bank account balance grow. One funny thing was that almost every day as I would fold the newspaper I would see the report on the Dow Jones like a flipping comic strip that never changed. Yes, I’m old enough to say that I remember when the Dow was below 1000 points. I’m pretty sure I remember it in the 600s. That early exposure led me to research the stock market and how to invest. When I was thirteen or fourteen, I had accumulated a few thousand dollars and wanted to invest it. I called a brokerage firm and found out that I had two strikes against me. One, the representative told me that the firm didn’t open an account with less than $10,000. Honestly, in my memory it seems like I was told $25,000, but that seems high for the late 70s. Second, because I was a minor, I wasn’t eligible to just open my own brokerage account. That really didn’t seem fair, because what little I knew about investing was more than most of the adults I knew. As the years have gone by I have taken an active role in managing my investment portfolio. I read annual reports and I stay abreast of general market news. What I ignore is the daily report of the Dow Industrial Average. I wish that journalists would stop reporting on it. I don’t even care about the NASDAQ or the S&P. The daily report noting the valuation and whether it is up or down from the previous day results in more confusion and less understanding from before the item was reported. The daily update lacks the most important factor in investment understanding. Perspective.

The report preys on the emotional response of the listener, viewer, or reader. The daily average leaves out critical data that is necessary for better understanding of the market and investing. It’s a bit of data that shouldn’t even form a part of a serious investment model. Further, the reporters and anchors who announce the average report a 3.4% drop with the same intensity of a .4% rebound. If I never encounter a daily report of the Dow again, it’ll still be too soon.

Because when it comes to investing, the Dow proves the adage that sometimes no news is good news.