Good morning, good afternoon, good evening. This is Jonathan Satovsky of Satovsky Asset Management and on today’s episode of, “Seeking Wisdom, Wealth, and Wellness,” I want to share a concept that’s a Wall Street aphorism called, “Buy on the rumor, sell on the news.”
Well, why do I say that? This week the Federal Reserve is meeting on Wednesday and there is likely to be some tightening of money supply, raising of interest rates, and in advance of that, January has started out as the worst January in history, thus far, with a ten percent correction for the broad markets and over fifty percent decline for many individual assets underneath.
And people are in fear of the future. Pessimism is spiking, people are placing their bets on a decline of the future, and yet, this could be a case of, “Sell on the rumor, and buy on the news.” Because at the end of the day, it’s just recalibrating how people can brace for absorbing higher interest rates into their lives, into their portfolio, and looking around and saying, “Where are the alternatives of where I can allocate capital smartly?”
And there’s immense opportunities to allocate capital buying profitable businesses—small businesses, large businesses all around the world. In fact, there’s an eighty percent spread between high and low—52 week high and low on average, over a long stretch of time of individual names. So, every day there’s an opportunity to be optimistic about the future. Just develop a process and a path that you can shill on your way to wisdom, wealth, and wellness, and ignore the Wall Street aphorism, “Buy on the rumor, sell on the news.”
Sell on the rumor, buy on the news.
Have a great day.
