What information should be ignored when trading forex
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Looking at the stock market from an investor's perspective, it is easy to see that any new information in the market causes a lot of noise. Sometimes there is so much noise that it is hard to grasp the point.
Investors are constantly bombarded with information. This is especially true today when the Internet is overflowing with all sorts of information. The problem is that much of it is not only useless, but can throw you off track in the long run.
Here are the sources of information that the long-term investor should ignore as much as possible:
Short-term stock market movements. It is useless and even dangerous to follow the market and your stocks in the short term. What's the point of following the stock price every day (or more often)? If you could, would you want to track the value of your house every day?
Most economic data. It's important to know roughly where you are in the economic and stock cycles. However, keeping track of all economic data published on a regular basis is not productive. Inflation, employment, GDP, and Federal Reserve decisions are not data that should strongly influence your decisions. Politics should be incorporated into the process.
Your short-term returns. What's the point of knowing how your portfolio performed last week? Last quarter? Or even last year? And is it really useful to know if your portfolio is outperforming the market in the short term?
The performance of specific stocks in your portfolio. If you're going to evaluate the performance of your portfolio, do it over a period of at least five years. But is it useful to focus on the disappointing performance of a few stocks in your portfolio? What matters is the overall performance.
Returns of others. Is it useful to compare your returns, especially in the short term, with those of neighbors, friends or family members?
Fancy titles. There are always fancy names or market segments. There's not much to see in the current market! Better to ignore the sometimes unusual and very attractive characteristics of what is trendy.
Predictions. It is illusory to believe that anyone can regularly make reliable predictions about the economy, short-term stock market performance, or future corporate profits. It is best to ignore such predictions when making stock decisions.
Social media. If you visit social media, do so for its entertainment value, not for the information you get from it, at least not for your investments.
Judges. Someone who predicts the end of the world will have a much larger audience than someone who is balanced or long-term optimistic. The media often favors sensationalism because it is the one that generates the most interest.
This material was wrote by support of the site 1plus-smart.com.
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