"They’re unpredictable, volatile and prone to sharp emotional swings. They have short attention spans and find change difficult because they are frequently scared of new things or overly enthusiastic about them. They’re impulsive, demand attention and throw tantrums when they don’t get what they want. I’m not describing toddlers but traders," writes Ford School economist Justin Wolfers in a guest essay for The New York Times.
He then shares how to make sense of market fears coming from Wall Street:
"Rather than getting caught up in the moment, I looked up the advice that I offer the freshmen who take my introductory economics class: “Stock prices are often the first sign of either a strengthening or weakening economy, although it’s also been known to send false signals. It’s worth following, but don’t obsess over every blip.”
He advises readers to keep a long-term focus, and to "keep an eye on the hard economic numbers that describe our present reality."
Read the full commentary here.
