Ah, yes, I remember it well (Part 3)

This was quite a week of business and investment news, wasn’t it? Bad news. Depressing news. Scary news.

Did following this news make you any money? Did it save you any money? Did it tell you anything about the future? And, can you even remember very much of it, other than that it was bad, depressing and scary?

The fact is, if you acted on news this week by buying or selling an investment, you won’t know whether it was a good move until (a) you reverse the trade, or (b) you cash out to spend the money. If you’re like most of us, “a” will never happen, and you’ll forget what you did, much less why you did it, by the time “b” rolls around. Ah, no, you won’t remember it well.

So, although you (and I, I admit) will continue to follow the daily business news, we must recognize that it is very unlikely to help our long-term investment results. And, besides, our fund managers and financial advisors are already doing this, which they are able to do without getting emotionally involved and with a more seasoned perspective.

My ultimate solution, which allows me to follow the daily news yet not commit financial self mutilation by acting on it, is this. I read the paper each day, but I also glance at yesterday’s, or one from last week. This reminds me that business and investment news may be attention-getting, but it’s not worth getting worked up about. And, it’s certainly not a sound basis for altering a well-designed, long-term investment program.