The U.S. Stock Market can be intimidating.
It can be hard to understand what it is and how it works, especially in times like these.
The people who seem to know – financial talk show hosts and reporters, for example – tend to communicate in a different language. They regularly use words like, “puts,” and “calls,” and “shorting,” and “being long,” and “bulls,” and “bears.”
Understanding the reports on the stock market’s activity can be just as difficult, with all the graphs, and percentages, and numbers. Always the numbers. The red arrows and green arrows.
Everyday folks are made to feel like the financial markets are too technical and complicated to understand. So, most of us don’t put a lot of effort into trying.
But, if you listen long enough and if you listen closely enough, you start to hear something else. You start to hear the word, “sentiment,” being used – a lot.
Market sentiment is, “the general outlook or attitude of market participants towards a particular stock or the overall financial market.” In other words, sentiment is simply, “the way people feel about an individual company or the stock market as a whole.”
And, as we have all seen over the last week, sentiment can significantly move the entire U.S. Stock Market – indeed, all of the world’s financial markets – up and down every day.
The stock prices of companies have not been thrashing about over the last week because, suddenly, their sales numbers are horrible, or because they are spending way too much, or because their products or services are defective.
No, it’s not about their numbers, or any percentages, or any graphs or charts. It’s not about any company data at all.
It’s about the “general outlook.” How do investors feel? The market’s whiplash is about this squishy thing called sentiment. Sentiment, we are reminded, is more important than any data and, usually, it’s not very complicated.
The reminder for us in advancement can be formed as a question: What is the sentiment people have toward our institution’s brand? What do people feel about our institution today and what the future holds for us?
In answering this question, we can distribute the infographics, the data, the percentages, the charts, reports, and graphs and hope that people connect the dots and end up feeling a certain way about our institution.
Or, we can craft and communicate the compelling and usually very simple stories about our institution’s future that promote the importance of our mission and the effectiveness of our plans.
It’s never really about the data. And, it’s rarely complicated. What matters most are the simple stories we tell ourselves and each other.
Because stories create sentiment. And, ultimately, it is sentiment that drives people’s behavior. . . and stock prices.
