Friday, November 11, 2011


Today’s article is a guest post from Professor George Morgan.

WallstI became aware of the stock market 45 years ago. But, the market that I was introduced to was a very different market than the one we have today. The market I meet was a physical place that was run by people who stood on the floor of a huge building and took orders over the phone and then completed those trades by hand. News came from a ticket tape, the morning newspaper and land lines. It was a market that sometimes turned emotional. At other times it moved at a snail’s pace, when it moved at all. But, the majority of the time it displayed a sense of rationality and order.

Today’s market is an entirely different animal. Today the market has replaced humans with computers that decide when to buy and when to sell. Then the computers complete the transactions among themselves. It no longer has a geographical center, but rather it spans the globe. Stocks that were once only traded on the New York Stock Exchange can be bought and sold almost anywhere in the world. Trades and information move at the speed of light. The market that I met was dominated by the actions of the individual investors. Today’s market is dominated by institutions and the individual investor must learn to accept this and adjust accordingly. Currently, volatility is the general order of the day with rationality and order taking a distant back seat.

Jack Walsh, the iconic ex CEO of General Electric is fond of saying, “Change before you have to.” It is critical for investors to appreciate the fact that not only will the market continue to change, but like the rest of our world, the pace of the change will accelerate. Investors need to be prepared to adjust their thinking and seek out solutions to an environment where constant change is the only thing not changing.

Professor Morgan completed his undergraduate work at San Diego State University and his graduate work at Purdue University. He has held faculty appointments at Purdue University and Ball State University. He has 30 years’ experience as a Financial Advisor with two local brokerage firms. He currently holds a position as Adjunct Professor of Finance at the University of Nebraska, Omaha. Learn more or contact Professor Morgan at: George Morgan - LinkedIn

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