2024-08-21
5 分钟Hello, Alice Fullwood here, co-host of Money Talks,
our weekly podcast on markets, the economy and business.
Welcome to Editors' Picks.
You're about to hear an article from the latest edition of The Economist.
Thanks for listening.
That, in short, is the advice given to retail investors when stock markets convulse,
as plenty have over the past few weeks.
Watching hard-earned savings disappear in a flash tends not to promote a cool head.
So do not check your portfolio, do not tot up your losses, and,
above all, do not decide that now is the time to overhaul your entire investment strategy.
Simply wait for the storm to pass and for share prices to resume their long march upwards.
Insofar as it dissuades the nervous from panic selling after a big drop,
such advice is sensible,
even if the investment platforms dispensing it are hardly acting out of altruism.
It's about time in the market, not timing the market.
is a mantra with particular appeal to those who charge fees in proportion to the time their clients spend in the market.
Yet the idea that doing nothing is the only proper response to volatility is also deeply unsatisfying,
so much so that it stretches credulity.
Everyone knows that markets can overreact and that wild swings in prices may be caused by technical factors rather than changes to economic fundamentals.
That does not mean they convey no useful information at all.