He’s Just Not That Into You is probably one of the few chick flicks made in recent years that’s worth watching, if you ask the folks around our office. But this post isn’t about the performances, screenplay or dating advice found within its film reel. No, as it turns out, the movie has a message for stock investors today.
Stay with us.
In the movie, Gigi, played by Ginnifer Goodwin, is a stereotypically obnoxious and borderline delusional single woman who is constantly reading between the lines of the words and actions of the men in her life. No matter how outlandish the excuse, or how slow they are to return calls, she finds a way to construct exotic excuses for their behavior, duping herself into believing that things will be different before getting her heart shattered. After a dose of tough love, she has a bit of an epiphany we wish investors would take note of as well:
Remember when I went out with that notary public and he cheated on me and then Anastasia from upstairs told me about how her boyfriend cheated on her in the beginning then he totally changed and now they’re married and crazy in love? …Anastasia is the exception- not the rule. We have to stop listening to these stories because the rule is most guys who cheat on you up front don’t really care about you very much… [W]e’re not the exception- we’re the rule.
What’s the point we’re trying to make here? The point is that the bulk of the investing world sounds a lot like Gigi these days. The stock market has been their on-again, off-again lover for decades now, by turns exhilirating and abusive, and yet they keep going back. They read between the lines of circumstantial commentary, dreaming up ways to justify their persistent passion (see Goldman Sach’s reading of yesterday’s FOMC announcement). They ignore information that precludes their delusions (see Bill Gross’ death sentence for stocks yesterday). They continue to believe that this time is different. They insist that they are smarter than the markets, can time everything beautifully, and can avoid getting burned. They cling to the illusion of being the exception.
But guess what? You’re not the exception. You’re the rule.
We have major financial challenges facing, not just the U.S., but the world, today and on the not too distant horizon. We’re not going to SEO bait this paragraph with a rehash of the concerns- they’re already blasted from every headline you read these days. If you really want a summary, you can check out our earlier take here. Most of us are not stock picking gurus, and even those that are seem to be closing shop more frequently these days.
That being said, in our minds, you have a choice. You can be like Gigi, and wait for stocks to rip your hearts into a million shreds, or you can consider your odds and fortify your portfolio against what comes next with non-correlated investments.
And that’s OUR tough love for the day.
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