Have you ever been under a power line or stopped at a traffic light, only to have the sound on your radio cut out, overwhelmed by static? Sometimes it’s so bad you can barely hear the program you were enjoying. Maybe you turn up the volume, straining to catch the voice behind the noise. But often, even that’s not enough to allow us to hear the person clearly. The stock market can feel the same way—important signals are often drowned out by the constant buzz of news and speculation.
The stock market is an incredible tool. It allows us to invest in great businesses and adjust our portfolios with ease. But this convenience comes with a challenge: it’s almost too easy to react impulsively, especially when the noise of the marketplace—media headlines, social media chatter, and economic fears—distracts us from what truly matters. This noise can lead investors to make the wrong decisions at the worst possible times.
Over my 30+ years in this industry, I’ve seen it all: the dot-com bubble, 9/11, the credit crisis, COVID, and countless other crises, both real and exaggerated. Time and again, I’ve witnessed how things often turn out better than expected. Even when the outlook seems bleak, markets recover, mistakes are corrected, and great businesses continue to thrive.
Take the credit crisis, for example. It was a near-collapse of the financial system, causing markets to lose significant value in just 18 months. Yet, barely two years later, we were back on track and shortly thereafter, the market had fully recovered. This resilience is a testament to the strength of well-managed companies that adapt, innovate, and grow—even in the face of adversity.
As investors, it’s crucial to tune out the noise and focus on the fundamentals. We don’t own the stock market; we own businesses—businesses that have weathered far worse and emerged stronger. By staying disciplined and avoiding emotional reactions, we can trust in the long-term success of these companies and the value they create for their customers and shareholders.
~ Travis Raish, CFA