Investors may want to consider the affect of too much information (TMI) on investment decisions. With CNBC broadcasting more than 12 hours every business day, it is easy to binge watch an endless flow of “news” which is often only someone’s opinion and frequently almost immediately contradicted by another commentator.
Over the last several years investors have seen a dramatic increase in the almost instantaneous promulgation of opinion and “information”. We now have “fake news”, “alternative facts” and unchecked posts on social media. Even well established professionals, with excellent credentials, sometime resort to hyperbole to emphasize a position or gain air time.
To use a sports metaphor, investors should be wary of the head fake. Over time, markets have gone up and are likely to continue this trend. While long term trends may be relatively clear, the short term is not. Market timing, which has adherents, largely by looking at the past, has proven to be very difficult as a path to future performance.
Investors would be well advised to focus on long term objectives, avoid head fakes and beware of TMI.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA