‘Buy the rumor, sell the fact?’ Not in today’s world

Recent events have shown that a strong economic backdrop trumps near-term turmoil

There’s an old adage on Wall Street: “Buy the rumor, sell the fact.” This conveys the idea that markets tend to rise on expectations of a positive event and sell off after the event occurs. In other words, because market expectations often go too far, sentiment can cool quickly once an event actually occurs and investors move on to the next big thing.

Two watershed events turn an old adage upside down