The Whirlwind of Noise That Affects Your Decision MakingThere are few ways to escape the barrage of news stories, tweets, blog posts, breaking headlines, and op-ed pieces concerning the stock market and the economy.
Currently the financial media hinges on every rumor and opinion of who will likely be the next Federal Reserve chairman; how Congress will handle the debt ceiling, and a good sound bite from Europe and the Middle East will always be thrown in for good measure. Some of these things are more important than others; it’s often determined by your investment time frame.
It’s never been easier to get updates with Internet access at nearly every street corner and smartphones that could probably beam down messages while in the middle of the Mojave Desert. There are email newsletters you can sign up for to get the latest stock tips and news stations and websites that will pander to whichever political beliefs you hold dear.
Unfortunately, most of it is just fluff. It doesn’t matter, and yet we are consumed by it.
There are thousands of ways to make an investment decision; some believe you could simply have a monkey throw a dart and be just as well off as having Harvard graduates with PhDs in mathematics and economics pick your investments. There are investors who rely on the movements of the sun and moon in order to know their proper asset allocation. Others prefer a more sound approach, taking into account the fundamentals of various companies as well as the movement and trend of their stock price.
The key to digesting all of these data points without getting a stomachache is carving them up into what’s important and what is not. Who will be the next Fed chairman could have far-reaching implications into not only the depths of your portfolio, but also your house and even your job.