Quiet the noise
If you want a forecast of our economy, you don’t need to search a financial newspaper for an expert’s opinion. Forecasts come at us anytime, anywhere – online, through social media, on TV and radio, and in the press.
The trouble is that media outlets are vying for our attention, and we can get inundated with predictions about a prolonged bear market, ongoing inflation or a long recession. What may be a normal and expected phase of the market cycle becomes warnings of doom and gloom.
Reasons to tune out the media
Alarming media reports can make you worry about your financial future and feel distressed. It’s important to consider that media outlets may be magnifying the situation to gain a captive audience. For your own peace of mind, you have reason not to let the noise get to you.
Another concern is when the messages of impending doom cause some investors to question their investments – and worse, to change their strategy. For example, an individual saving for retirement in a down market could be tempted to stop investing in equities until they regain confidence in the market. But they would buy back in when prices are higher and end up holding fewer shares or fund units.
Focus on sound principles
Your investment program is based on contributing regularly to a well-diversified portfolio that’s designed for your personal risk tolerance, time horizon and investment objective. Staying true to your program is the best way to weather a down market or capitalize on a bull market.
Also, recognize that turbulence is temporary, and time is on your side. Market downturns are historically followed by recoveries.
Keeping these principles in mind can help tune out the media noise. But if media reports ever cause you distress or make you wonder whether you should change the way you invest, please talk to us.