Aug 25, 2015

…If you weren’t paying attention to the stock market before Monday, you are now. ..”A 1,000-point drop in the Dow Jones Industrial Average will do that,” says best selling author Jason Zweig writing for the Wall Street Journal. The market recovered somewhat on Tuesday, but when we see blood red arrows pointing down for several days in a row, it is very easy to suspect the worst. Being sensitive to bad—or potentially bad—outcomes can be helpful, but reacting in herky jerky fashion can be costly. Big sounding numbers scare people. Experiments have shown that people believe cancer is riskier when they are told that it kills “1,286 out of 10,000 people” than when they hear that it kills “24.14 out of 100 people.” Hearing “1,286” immediately brings a large number of victims to mind, while “24.14” is simply a much smaller number. Actually, 24.14 % would affect far more people. Steve and Sinclair review Mr. Zweigs article and then review the facts about bear markets and corrections. In the Q & A segment, high powered attorney Christopher McNichol joins the A-Team to discuss options on real estate, and how they differ from first rights of refusal, and first rights to offer. Steve wraps up in segment 4 with historical market perspectives.