Stock Market Selloff?

Following the economy, especially lately, can be confusing. Reporters are not helping matters.

A article, for example, blames yesterday’s stock market plunge on a selloff.

But there was no selloff; every seller requires a buyer.

Just as more people were selling, so were more people buying. Describing yesterday’s market as a selloff only tells half the story.

The same article says that today’s 600-point gain happened when “investors scooped up a variety of shares.” But those buyers cannot buy unless somebody sells to them. Again, the article only tells half the story. And here is one case where two halves do not a whole make.

So what really happened yesterday and today? High trading volume. That may not sound very exciting. But at least it’s accurate.

Flaws and all, the article can still teach us an important lesson, if only we let it: sometimes financial reporters don’t know what they’re talking about.

Don’t believe everything you read, in other words.

Something to keep in mind while trying to make sense of these troubled times.