Want to Be a Better Investor? Focus Only on the News You Can Use
We all want to be informed when it comes to market activity, not only because it helps us better contextualize the economy, but also because it signals something about our outward persona: we’re intelligent, informed and good planners.
But, there’s a little secret that financial advisors know: while smart people invest their money, even smarter people understand when and how to follow its progress.
And when you are fortunate enough to work with a dedicated advisor, they can help balance that temptation to follow those ebbs and flows.
But, what about those just starting to grow their wealth or wanting to become more investment savvy?
Should you tune into quarterly Federal Reserve press conferences, scrutinize the monthly jobs reports, or watch CNBC from market open to market close?
No, and here’s why.
Consider everything that can change in a day’s time: conflicts can start and be resolved, stock prices can fluctuate, and breaking news can be trumped by… more breaking news.
A rule of thumb for smart investors is to stay informed enough about their personal portfolio allocation, but not to the extent it’s overwhelming and causes undue stress and possibly kneejerk decision making.
Monetary policy has been the indicator of economic growth in 2019 and it’s certainly important to pay some attention to the Fed’s decisions and language because it influences economies worldwide. But, following daily headlines can be a distraction from your long-term goals.
Be Your Own Program Director
Considering a personalized mix of news that provides context and considers long-term implications is prudent, and can be achieved in a manageable way.
Does your daily morning routine include reading the Wall Street Journal or Barron’s for market commentary? Fantastic. Or, are you more of a “viewer” who likes to watch Yahoo Finance or CNBC? That’s a good thing (especially when your Whittier team is sharing their deep insights with these outlets).
Perhaps podcasts are more your style and can function as a multi-tasking method while you commute into work; we really enjoy Bloomberg’s “Masters in Business.”
Certain financial blogs and social media channels can also help round out an economic feed, but we continue to be concerned about investors falling prey over dramatized commentary and fake news (and then further circulating it).
Still, not everyone has time for daily immersive reading; and in a world of non-stop information coming at us from every platform imaginable, we need a break from constant media overload.
What’s Happening Psychologically
Is the general American investor as in-tune with what’s happening economically as they need to be? The answer is both yes and no. They are often tuned in to the short-term, and not focused enough on the long-term.
People are reactionary by nature, and allowing those unbridled reactions to impact investment decisions creates problems.
Instead of considering the short-term consequences of today’s headlines, review the long-term ones, like:
- How much should I save?
- How much money do I need to retire?
- How long do I think I’ll live?
Putting Everything Into (Your Own) Context
Balance economic news with your personal situation.
At a minimum, annually check your portfolio and rebalance based on your personal needs and changes.
Remember, keeping a pulse on the markets is wise, just don’t let it steer your decision-making into obsessive territory.
The 24-hour news cycle isn’t going away anytime soon, and as much as we try to switch it off, it’s everywhere. And that’s not a bad thing. Knowing how to use it is the course of wisdom.
Disclaimer: Investment and Wealth Management Services are provided by Whittier Trust Company and The Whittier Trust Company of Nevada, Inc., state-chartered trust companies, which are wholly owned by Whittier Holdings, Inc., a closely held holding company. All of said companies are referred to herein, individually and collectively, as “Whittier”. This document is provided for informational purposes only and is not intended, and should not be construed, as investment, tax or legal advice. Please consult your own legal and/or tax advisors in connection with financial decisions. Although the information provided is carefully reviewed, Whittier cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided. Past performance is no guarantee of future results and no investment or financial planning strategy can guarantee profit or protection against losses. For additional information, please visit our website at www.whittiertrust.com.