INDUSTRY NONSENSE TO IGNORE

You can simplify your investing life if you know what to pay attention to and what to ignore. 

The financial media works really hard to get your attention and they do it with sensational stories.  We are all suckers for doom and gloom stories about the economy or the stock market.  Stories of the mega-rich and the star investors always sell.  Stories about promising new technologies capture a lot of attention.  But 99% of what the media and the advertisers push out to you is a complete waste of your time.

In today’s article, I want to help you save time and money by getting you to only focus on the things that matter. 

Let’s start with the information and the stories you should ignore:

1. Stock tips from anyone – people you know, media personalities, Wall Street analysts, and online posts.  I’ve said it before and I’ll say it again.  You should not be investing in individual stocks.  You should only be investing in large cap US index funds for your 401K.  Out of the 8 billion people on the planet, less than 10 people can beat the performance of the best index funds by picking stocks.  If you are interested in what successful companies are doing, feel free to read about those companies but do not waste your time following individual stocks for your own investments.

2. Get rich quick schemes – There is a ton of information out there about day trading stocks, stock options and other assets as a way to get rich.  Do not waste your time with any of this.  The odds of success are extremely low and the investment of time is massive.

3. The doom and gloom stories – Most of the biggest and boldest financial stories include the reasons behind the next big economic or stock market crash.  As humans, we are built with a negativity bias so we are all suckers for doom and gloom stories.  Your local news station uses the same approach to their evening news broadcasts.  No one can predict upcoming financial crises with any consistency and nobody is ever held accountable for their inaccurate forecasts.  Ignore these stories.  They will not come true and they will only upset you.  The rosy and positive forecasts will also be wrong but they will at least make you feel better.

4. Anyone promoting investments in alternate asset classes.  Ignore the many stories you will see that promote the benefits of investing in commodities like gold, silver, bitcoin, lithium, and international currencies.  Investing in these things is gambling and not investing. 

We all have busy lives and you can gain time in your day by not wasting any of your precious time on stories like these.

For investing purposes, there are only a few things that you should pay attention to.

1. The performance of the major market indices like the S&P 500 and the Nasdaq.  The Dow Jones Industrial average is the oldest and most frequently mentioned stock market index, but it does not mean that much since it only contains the stocks of 30 companies.  The Russell 2000 index is made up of small company stocks and is less meaningful to investors.

2. Macroeconomic data like unemployment, inflation and economic growth (the GDP).  These statistics are reported monthly and get a lot of headlines so they are pretty easy to follow.

3. Your own saving and investment plan.  Focus on the things you can control like how much money you are contributing to your 401K.  Once a year, you should review your retirement account and your retirement account projections to the age of 65.  Are you getting the full company match?  Can you increase your 401K contributions?

There are very few things that you need to pay attention to in the investing world and to follow these few items will take very little of your time.  By ignoring the other nonsense, you will find you will have more time in your day and your emotional health will improve.

Happy Investing,

Phil

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Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.

Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.