Page 173 - Psychology of Money - Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)

This goes for something as specific as the stock market. More than half of

all American households directly own stocks.⁵⁷ Even among those that
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don’t, the stock market’s gyrations are promoted so heavily in the media
that the Dow Jones Industrial Average might be the stock-less household’s
most-watched economic barometer.

Stocks rising 1% might be briefly mentioned in the evening news. But a 1%

fall will be reported in bold, all-caps letters usually written in blood red.
The asymmetry is hard to avoid.

And while few question or try to explain why the market went up—isn’t it
supposed to go up?—there is almost always an attempt to explain why it
went down.

Are investors worried about economic growth?

Did the Fed screw things up again?

Are politicians making bad decisions?

Is there another shoe to drop?

Narratives about why a decline occurred make them easier to talk about,
worry about, and frame a story around what you think will happen next—

usually, more of the same.

Even if you don’t own stocks, those kind of things will grab your attention.
Only 2.5% of Americans owned stocks on the eve of the great crash of 1929
that sparked the Great Depression. But the majority of Americans—if not
the world—watched in amazement as the market collapsed, wondering
what it signaled about their own fate. This was true whether you were a
lawyer or a farmer or a car mechanic.

Historian Eric Rauchway writes: