Any time you assign a narrative to a market event there is risk.  Let’s use the North Korea situation as a current example and hypothetical.

Bearish Point Of View (POV):  This is going to lead to war, sell stocks.

Bullish POV:  North Korea has been and will be a non-starter, buy the dip.

The risk to the bearish POV is obvious.  The assigned narrative just becomes another brick in the wall of worry.  You sell at the lows AND miss a good buying opportunity.  You get out of rhythm with the market.

The risk to the bullish POV is a lot less evident these days.  It’s simply that the narrative has been mis-assigned.  You frame market risk as a North Korea issue.   You adopt the mindset that you’re not selling just because of North Korea, when maybe the market would sell off for some other reason (supply and demand anyone?).  You get caught with outsized losses and eventually sell at the wrong time.

Being wrong in either case substantially reduces your potential performance.

These pitfalls can be avoided by focusing on price.  Plus, you’ll be a lot happier that way.

Trade ’em well.