by: Ken Kamen
The daily triple-digit moves of the Dow Jones Industrial Average have kept the media scrambling to find new hyperboles to describe the action. Based on the news of the day, they report, investors and traders are routinely “whipped into frenzy” either “clamoring to buy” or “stampeding for the doors.”
However, the increasing volatility can’t be pinned on “investors” and “traders.” In fact, the culprits behind these dizzying swings are not who, but what. They are caused not by panicky human beings but by sophisticated (and unemotional) computer-generated algorithms that turn data into trades in milliseconds.
It is vital for human investors who are saving and planning for retirement to understand what is going on so they can act accordingly.
(Full Story...)