Doomscrolling Can Kill your Portfolio

Doomscrolling Can Kill your Portfolio

There’s a new phrase thanks to Covid-19. It’s called “Doomscrolling”. The name derives itself from the irresistible urge to binge on the doom-and-gloom news. Since the pandemic began, screen time has jumped over 50%.

Experts are now warning that doomscrolling can take a significant toll on our mental, and physical well-being, making us angry, anxious, depressed, unproductive and less connected with our loved ones and ourselves.

Who can blame us? We are social animals, and by nature, information whores.  The news, especially bad ones, is like digital candy which is now available 24 hours a day.

For some weird reason, human beings are bad news junkies. To make matters worse, is that we always tend to have two assumptions about the situation: That it will only get worse and that it will last longer than expected.

Well, being constantly submerged in the negative news is not only a bad thing for your physical and mental wellbeing, it is absolutely terrible for your investment portfolio. The disconnect between today’s stock market and current news makes it even more confusing, and therefore alarming to many.

We’ve come a long way since the start of this whole mess. It wasn’t long ago that we had no idea exactly how Covid-19 spread with zero solutions in sight, the economy was literally being shut down with no end in sight and we had no idea what the government, Congress or the Federal Reserve response would be.

These are not the problems of today. Naturally, the economy has a long way to come back, but I feel the worst is behind us. It is important to recognize that this recession was not economically driven; it was a natural disaster. Therefore, the rules are different and the market is giving companies a pass on the next 2-4 earnings cycle as long as they see light at the end of the tunnel.

Our overwhelming advantage continues to be the Federal Reserve. Throughout their long career, the one thing we have always lacked is knowledge of what the Fed was thinking. Not anymore. They gave us their playbook, and it couldn’t be more straightforward – unmitigated fiscal support, full employment recovery and sustained inflation of 2%. That translates into “PRINT MORE MONEY”, which is music to investor’s ears.

For those who are worried about Weimar Republic style hyperinflation…don’t be. We are in a similar situation to what we had in 2008 when the Fed last printed money this ferociously and people were just as worried about inflation. In reality, assets are being destroyed faster than the government can create.

The Fed is a beast that you simply do not fight.

So for now, put down the phone or tablet and get out there, and enjoy this marvelous summer weather with your family and loved ones. I am on top of this market like a hawk and rest assured that I will take action if necessary. When this is over, we are going to wish we had this time back.

Feel free to call with any comments or questions.

Cheers -Keith

916-925-8900

“Invest for need, not for greed!”

Smart Money Newsletter

Written By: Keith Springer

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