• Skip to primary navigation
  • Skip to main content
  • Skip to footer

509-340-2420

mike@rennakerfinancial.com

  • Facebook
  • LinkedIn
Rennaker Financial

Rennaker Financial

Financial Advisor in Spokane Valley, WA

  • Home
  • About
  • What We Do
  • Services
    • Investments
    • Retirement Planning
    • Insurance
  • Risk Analysis
  • Recent Posts
  • Start a Conversation
  • Contact Us
  • Client Center

THE ONE THING YOU MUST LEARN FROM MONDAY’S FINANCIAL NEWS:

You are here: Home / Uncategorized / THE ONE THING YOU MUST LEARN FROM MONDAY’S FINANCIAL NEWS:

August 28, 2019 by Michael

The financial media just unnecessarily frightened millions of investors by reporting irrelevant data in an alarmist way.

When you saw headlines shouting “DOW LOSES 1,175 POINTS IN BIGGEST SINGLE-DAY DROP IN HISTORY!!”, how did you feel?

If you are like most investors, it scared you. But if you take this advice to heart, you will be one of the smartest and calmest investors around:

From now on, whenever you hear news about “the number of points the Dow went down (or up)”… ignore it. You don’t care about points anymore. You care about percentages.

Quiz: 
Q: What the single-biggest one-day loss was for the Dow?
A: 22.6% (“Black Monday” on Oct. 19, 1987)

Q: How may points was that?
A: 508

Q: What was the second-worst?
A: 12.8% (Oct. 28, 1929)

Q: How many points was that?
A: 38

Why were headlines screaming “1,175 point drop!” not just irrelevant but also harmful? Take a look at the Dow. It’s over 24,000. That “massive” drop of 1,175 was a little over 4.5%. It’s significant, but it doesn’t even make it into the top 20 list.

My point:

  1. Headlines like that might inform and frighten, but they do not enlighten.
  2. Frightened investors make mistakes.
  3. Enlightened investors make money.

If you are interested, here is a chart from Wikipedia listing the 20 biggest single-day percentage losses:

Uncategorized

Learn More Retirement Strategies

Stay informed with monthly tips for your financial journey.

Footer

About

Investment advice and financial planning offered through Financial Advocates Investment Management, a registered investment advisor, DBA Rennaker Financial. Financial Advocates Investment Management and Rennaker Financial are separate entities.

Check the background of this financial professional on Investment Adviser Public Disclosure (IAPD) website.

View our Client Relationship Summary PDF

Contact Info

Rennaker Financial, LLC
1715 S St Charles Rd
Spokane Valley, WA 99037

Office: 509-340-2420
Fax: 509-279-0325
  • Facebook
  • LinkedIn

Copyright © 2023 Rennaker Financial. All rights reserved. Return to top