The Mismatch Between the News Cycle and Your Investments
Why Most Financial News Isn’t Really News
Most of what passes as financial news isn’t really news at all. In many cases, it’s primarily predictions about things that might (or might not) happen that day in the financial markets. This presents a serious mismatch between your long-term objectives and the short-term focused financial news cycle.
The obsessively minute to minute financial news cycle and your main financial goals are only distantly related… one doesn’t have much to do with the other.
No matter how hard you try, short-termitis follows you around. It’s nearly impossible to ignore. Your work colleagues, your friends, and your family likely all contribute innocently to keeping the short- term front and center in your mind.
Staying Focused on Long-Term Financial Goals
Your field of vision helps outline your goals and what you need to do next to move toward them. Consciously thinking about your long-term goals is the beginning. The real work, however, comes when you take steps toward these aspirations in the face of volatile market conditions. Action steps mean much more than intentions.
Every day you’re basically taking a real time test in patience. The more that you steer clear of the short-term issues the better. Markets can test your resolve and make staying the course difficult. Patience is a valuable yet underrated financial behavior.
Even if you have a long-term view, it doesn’t mean you won’t have to endure the daily barrage of nonsense that makes up much of the financial news. The long-run is just a series of short-terms strung together and some of those short-terms will be rocky.
Why Long-Term Investing Requires Patience and Support
Here’s the even harder part. Unless you are extremely disciplined, you will need help in order to sustain your patience for the long-term. Your spouse, close friends, and work colleagues can all play a supportive role. It’s important to realize, however, not everyone in your friends and family circle is well suited for this task.
A good exercise for helping you prepare mentally for long-term thinking is to substitute the word flexible for long-term. The more flexibility that you can inject into your financial decisions, the less dependent you are on what happens in the short-term.
How to Put Financial News in Perspective
Another beneficial activity is to think about the prevailing topic de jour in the financial press. Ask yourself if you’ll care about this topic next month or next year. What about ten years from now? The answer will provide you with concrete evidence of how much temporary information you’re consuming.
Eventually, if you continue this process of critically examining the flow of information that you digest, you may find your gaze shifts in favor of enduring long-term information.
The problem is, there is a seemingly endless supply of temporary or expiring information competing for your attention. Some of the short-term temporary information comes your way inviting you to garner some particular insight. What the financial news pundits don’t tell you is much of this information will quickly lack significance with the passage of time.
Focusing on Enduring Financial Information
Enduring information is harder for you to find and sometimes more difficult to digest. Still, you can benefit more from understanding important behaviors found in this information. Learning how others react and process financial information can be a difference maker in the long-term.
Regardless of your age or stage of life, coming to grips with the inevitable clash between the daily financial news and your long-term goals is critical. Keeping what matters most to you top of mind helps diminish the importance of day-to-day news. Start there. Ready for a real conversation?
Disclosure
Apollon Wealth Management, LLC dba J.E. Wilson (Apollon) is an investment advisor registered with the SEC. This document is intended for the exclusive use of clients or prospective clients of Apollon. Any dissemination or distribution is strictly prohibited. Information provided in this document is for informational and/or educational purposes only and is not, in any way, to be considered investment advice nor a recommendation of any investment product or service. Investing involves risk, and while remaining invested can support long-term goals, it does not guarantee a profit or protect against losses. Advice may only be provided after entering into an engagement agreement and providing Apollon with all requested background and account information. Please visit our website https://apollonwealthmanagement.com for other important disclosures.