We are all adrenaline junkies. The market goes up, we want to buy. The market goes down, we want to sell. It is an exciting roller coaster.
What if, just if, what you watch or read on CNBC, Bloomberg, or Forbes, is just noise. It makes you feel like you must take action. But in point of fact investing should be kind of boring. If you have done your due diligence in picking out your companies, the markets ups and downs should mean very little.
So how is financial news keeping you broke?
- If you believe everything you read or watch, you might make decisions where the company financials would lead you in the opposite direction.
- You might unwisely panic at every major market downturn.
- You might pick up on macro (national or global) economic changes that are less than the full truth.
- You might just give up once you are wrong too many times
Company Financials are Data, Facts, and Truth
Although company financials are hard data, or generally so, they are a little dated so it is easy to pick up speculation from an analyst that seems to be more current. Truth is, it is only speculation.
If you get concerned about the company you own, check the financials. Trust the financials. Ignore the rest.
Major Downturns Come, Don’t Sell
The market does “crash” on occasion. The absolute wrong time to sell is when the market is going down. In fact, it might even be time to buy. Wait until things settle though.
It is easy to panic when the sky is falling and the financial news reinforces the emotions we are feeling.
Big Reported Economic Changes May Not Be True
It is possible that something is recognized within the larger market and financial news loves to report on it. The conclusions they reach, though, are less than true 50% of the time or more. If you are doing the right things, you will pick up big changes within your company financials as you keep up with the company.
You May Give Up If You’re Wrong Too Much
If you react to the financial news and find yourself wrong too much, you might just get frustrated and quit. I have heard it said that you are either right or you learn. It is part of getting better. Just depend on the numbers and you will shock yourself with your results.
I am not saying that financial news is “fake news” (well maybe some of it is), but it is information overload and does not help you make money. If you must follow the news, make sure to read news about your companies, and make sure to ignore the noise.