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Tune Out the Mind Games

The market itself will give you better information than any opinion-monger.
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The stock market is a mind-twisting game of emotional responses that are exaggerated on the spectrum of fear and greed. We get too fearful and then too greedy and back again. Our emotions are driven by the desire to make money, but more importantly by the desire to not lose money.

One of the key drivers of emotional triggers is none other than Federal Reserve Chairman Ben Bernanke, who for better or worse is trying his best to change the mind-set of every American, and quite possibly every living person. Quite the task, considering that investor confidence was smashed multiple times over the last decade. After the dot-com blowup and subsequent bear market from 2000 to 2003, it seemed safe to go back into the water, supported at that time by easy monetary policy from the Fed, which at that time was led by Alan Greenspan.

Are you concerned about the heavy liquidity that is clearly supporting these markets? Do you shudder at the thought of being the last one out the door, possibly left holding the bag when the liquidity pump turns off? I get that, but frankly the liquidity is something we have no control of. In fact, those who have chosen to fight have no doubt been bruised and battered, if not nearly wiped out.

I learned long ago to not fight the Fed, as Marty Zweig famously advised, and clearly that has been the best guidepost in this market. Do we guess when the Fed is done? It's really not necessary. In fact, the signs will be there, and even the Fed will tell us -- we get good transparency from this group. So why listen to anyone's opinion, when in most cases there is little accountability?

Do you fall victim to the constant chatter of the crowd? To be certain, the noise is deafening. So-called experts, analysts and pundits say to do this or do that, when all we hear is guessing. And this is supposed to be the smart money?

The market will give you far better information than any talking head on the screen. Pay attention to what is happening in front of you, and you'll be far better off. Let the rest of the crowd suffer at the hands of someone who has little to do with your P&L. "Do your homework," as Jim Cramer likes to say, and don't let the noise influence your decision-making process.