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Why You Should Pay Less Attention to Financial News
October 28, 2020
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Have you ever heard it said, “The only ones that get hurt on a roller coaster are those who try to get off while it’s still moving.” The same is true for investing in the stock market.

With market predictions, reports on specific companies or holdings, and conflicting advice from different sources, it’s easy to get overwhelmed by the “noise” and start making emotional decisions instead of strategic ones.

In reality, by the time you’re hearing about something in the news, it’s typically too late to do anything about it. And reacting after the fact often does more harm than good. You can save yourself from worry and poor decision making by tuning out some of the noise, especially about sectors of the market that you aren’t even investing in.

Remember, you want to be an investor, not a reader. Excessive observation will not make your investments perform better, it will just add stress to your life that doesn’t need to be there.

When you’re building your investment portfolio, it’s important to keep in mind that good returns usually come from long-term investments. Since financial news is mostly about short-term predictions, that information may not even apply to you.

You also should understand that the market is looking at predictions for 18 months in the future, but it’s also based on how worried people are. For example, if the economy is doing well, but people are nervous about the future, the market might benefit in the short-term.

If you’re worried by financial news and want to adjust your level of risk, one of the key things to focus on is diversity. With a diverse portfolio, you won’t be as dependent on any single short-term investment, which means you’ll have a smoother ride through all the market highs and lows.

Leanne Fee

Leanne Fee

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