Adolescent Investing

You've undoubtedly seen the news stories today about the loss in stocks in the face of the quarter percent interest rate drop by the Fed. The standard rationale being offered is that Wall Street expected a half point drop. That is equivalent to saying that a screaming teenager's tantrum about not getting to do something his or her friends are doing. It's not - the problem is a lack of maturity and realism on the part of the one doing the screaming.

It's clear that Wall Street invests based on emotion, and not strictly on logic. People like Alan Greenspan have pretty much said so, and if you look at the way stocks react, you can see direct evidence and not even wait for the experts to weigh in. So, investors wanted a double cone and instead got a single scoop, and so decided that they'd go home and pout.

In other words, there's no reason to get that upset or worried about the market, because it's as useful as getting twisted up over a teenager on a rant. What the grown-up parent or investor does is take all this in stride and do what is necessary anyway.