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Layin’ It on the Line: Wall Street bad news is no longer good news for them

By Lyle Boss - Special to the Standard-Examiner | Apr 19, 2023

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Lyle Boss

For decades, the stock market has been driven by the adage that “bad news is good news.” This means that when bad news is announced, the market often responds positively because investors anticipate that the government or the central bank will take steps to mitigate the negative impact of the news. This could involve measures like interest rate cuts, fiscal stimulus or other interventions designed to boost economic growth and stabilize the market.

However, this traditional wisdom has come under increasing scrutiny in recent years. With the global pandemic and its ongoing effects, many companies are struggling to maintain profitability, and the prospect of government intervention may not be enough to offset the negative effects of bad news. Additionally, investors are increasingly concerned about the potential long-term impact of factors like climate change, geopolitical tensions and technological disruption, which could create uncertainty and volatility in the market.

As a result, investors may now be more cautious and reactive to bad news rather than immediately seeking to take advantage of it. This could result in more significant and prolonged market downturns, even if the bad news is ultimately followed by government intervention or other positive developments.

One factor contributing to this shift in market behavior is global markets’ increasing complexity and interconnectedness. In the past, investors may have been able to anticipate the impact of bad news on a particular sector or region and adjust their portfolios accordingly. However, in today’s market, bad news in one part of the world can have ripple effects across the entire global economy, making it harder to predict and manage risk.

With bad news comes uncertainty that breeds discontent that creates volatility. For many of us, it means not having a clue what to do. Using a safe money option of fixed-interest annuities shines a positive light on a highly complex issue.

Wall Street, of course, would never consider this a viable option because they need one constant thing to happen in order to ensure their success: money in motion. Money in motion means change; change can mean exposure to risk and the possibility of paying compensation, and compensation can lower a person’s investible assets.

Consider the opposite of money in motion; consider money on deposit, earning a guaranteed interest that removes risk exposure.

Lyle Boss, a native Utahn, is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management. Boss Financial, 955 Chambers St., Suite 250, Ogden, UT 84403. Telephone: 801-475-9400.

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