Motley Fool Money 4 Ways to Manage Risk
Jan 25, 2022
Bill Mann, a Senior Analyst at Motley Fool, and Robert Brokamp, a fellow analyst, delve into the intricacies of market volatility and consumer spending trends. Mann discusses the implications of American Express's performance on companies like Visa and Mastercard. They also uncover the lengthy process behind Johnson & Johnson's split. The duo emphasizes the importance of diversification to manage investment risks, warning against the pitfalls of FOMO and single-stock investments. Their insights offer essential strategies for navigating today’s unpredictable markets.
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Market Volatility and Sentiment
- Shopify's value didn't actually change by $40 billion in one day.
- Extreme fear drives investor sentiment, not fundamentals.
The Speed of Market Volatility
- Market volatility is increasing due to high-speed trading and increased FOMO (fear of missing out).
- This volatility is a cost of investing in stocks.
Johnson & Johnson Split
- Johnson & Johnson had a mixed fourth quarter, but they wrapped up the fiscal year with $94 billion in sales.
- They plan to split off their consumer products business in 2023.