A recent television series has refocused attention on the “trial of the century” when O.J. Simpson was cleared of murder charges in 1995. About 7 million viewers are tuning in every week to reminisce about the events that dominated the news twenty-one years ago.
An audience size of seven million viewers is one sign of the change in America since that trial. An estimated 95 million to 150 million people watched the verdict live as it was announced. Other indicators show that American activity slowed drastically for a few minutes – long distance phone usage dropped 58 percent in those few moments while the world waited to learn Simpson’s fate and President Clinton stopped working as he reportedly watched the verdict with his staff.
The Los Angeles jury even affected Wall Street where trading volume declined by 41 percent as the verdict was announced.
America has changed since then and it’s unlikely any event could have an impact like that. Wall Street now trades almost on auto-pilot and it’s unlikely the computers behind high frequency trading would pause for any news story.
Media is now more divided and it is doubtful we could get almost half of the population to focus on any single event. About one-third of the population watched this year’s Super Bowl, long rated among the biggest viewing events in the country.
If no story could capture America’s interest like O.J. Simpson did, it is reasonable to believe America is a different country than it was more than twenty years ago. In light of that reality, it would be a good idea to review investment strategies in the modern era.
Many investors are following a buy and hold approach or a diversification strategy that worked well in the 1990s. They should reconsider whether it makes sense to hold bonds in a negative interest rate world and whether long-term buy and hold can really deliver significant gains when so many have adopted that as their best idea.
There’s no single answer to the question of what all investors should do with their money but all investors should implement a 21st century trading strategy rather than relying on advice developed before the world was transfixed by a football player’s murder trial.
CMT, is a subadviser to a mutual fund family and a chartered market technician. To read more Michael Carr, CLICK HERE NOW.
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