There is financial noise everywhere.
Everyone knows about CNBC and Bloomberg. They know about the Wall Street Journal, Fortune, Forbes, Money and a whole host of magazines that want to tell you what you should know. They all have smart people talking about important events.
Often I see really smart people who disagree with each other. Those disagreements make it hard to know who to believe. The most frustrating part of it all is that most of the financial news stories I read want me to believe that what they say actually matters to me.
They don’t even know me. How can they be so sure that I need to pay attention to them?
I remember years ago having an investor call me for advice. He wanted to get out of everything because he was convinced that the stock market was going down. I asked him to bring in a statement of what he owned so we could have a better conversation about his concerns. When reading his statement, I realized that he didn’t own any stocks. All he was invested in were bonds.
He had been listening to the news and it sounded so bad that he couldn’t take it anymore even though he had no exposure to the thing everyone was worried about. That’s like not eating corn because of the recent scare in the hog market. They are both commodities, but that’s about where the similarities end.
Back in the old days, the ‘80s, there was still limited access to the investing world and the financial news seemed to provide more substance and less entertainment. Thanks to the access everyday workers have to the financial markets through their retirement plans and through the mutual fund markets, almost everyone has access to the financial markets.
With that access comes interest and with that interest comes competition for your attention. And with that competition comes a lot of financial entertainment pretending to be news. There is a lot of white noise out there that gets in the way of making good financial decisions.
Maria Sharapova is one of the great tennis players of all time. She has won the career Grand Slam and has five major championships to her credit. Over the past 10 years she has consistently been ranked in the top 10 tennis players and rated as high as No. 1. She is also known for her high octane grunt when she hits the ball and the fact that she can double fault her serve at very inopportune times. She has a ritual of facing away from the tennis court between points to give herself a moment to refocus on what is important. She said that it is too easy to get distracted from what you are supposed to be doing and to let other people control the tempo and direction of your game.
It is crucial to stay focused on what is important to you. You can’t know everything. Just because everything matters doesn’t mean everything matters to you. Determine where you need to focus your effort and energy and then fight all that noise out there that is trying to take you away from where you need to be.
Scott Reed is CEO of investment advisory firm Hardy Reed in Tupelo. Contact him at (662) 823-4722 or firstname.lastname@example.org.