Noise in the markets

Over the last few weeks, you’ve probably seen some of these headlines:

  • The worst of the correction could still be ahead for the market, and one chart offers evidence
  • Are we entering a bear market?
  • Dow drops 800 points, led by tech shares, as stock market investors fear higher rates

I think it’s time I let you in on the secret: none of these headlines matter.

It doesn’t matter if they were written last week, last year, or even in the last decade.
Just consider these “classics” from 2014, another year for mid-term elections:

  • Stocks plunge on emerging market fears
  • Big stock drops rock Wall Street
  • Stock market volatility fans fears about equities

There will always be noise in the financial markets. Financial reporters will continue to write stories about the noise. It has nothing to do with you.

Here’s another secret: people with diversified, carefully designed financial plans that fit their goals get to ignore the noise.

But, because we’re all human, even the savviest of investors appreciate being reminded that:

  1. The noise doesn’t matter.
  2. One of the main reasons you have a diversified plan is so you can tune out the noise.

So, that’s my goal today. To help you remember that the things you can control, you’ve controlled. The rest? It’s just static trying to distract you from your goals.

Fair warning though. With the start of a new year just around the corner, the volume will probably get turned up, and the predictions will start flying.

Over the next few months, we’ll continue to see headlines that talk about trade wars, deficits, and interest rate hikes. If you must, read them to stay informed, but please don’t stress over what it all means.

Because here’s my final secret: You can’t do anything about any of it.

The markets will do what the markets will do. The normal ebbs and flows of the financial markets will continue, and the noise surrounding these events will persist.

It’s why I push so hard for you to have a plan designed to absorb the ups and downs of the markets. As the noise intensifies in the background, you can stay focused on what matters most to you.

It’s a message that I hope stays with you during the upcoming holidays as you spend time with friends and family. Enjoy your time together and remember that you can turn the noise off at any time.

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