In this day and age, you can get just about as much information as you want with just a few mouse clicks thanks to developments in information technology. It has been wonderful for investors, but this torrent of information can actually be a double-edged sword.
You see, too much news can be harmful for our investing portfolios. In his brilliant satirical take on the financial industry, The Devil’s Financial Dictionary, journalist Jason Zweig writes (emphasis mine):
“In a series of brilliant experiments conducted in the 1980s, the psychologist Paul Andreassen found that investors who received frequent news updates on the companies in their portfolios traded roughly 20 percent more often and earned less than half as much, on average, as investors who didn’t follow the news.”
It’s important to follow crucial developments in the companies you own and the stocks or markets you’re tracking, but looking up the financial papers daily can be poison. So, one simple way for you to become a better investor would be to tone down the volume of financial news you’re consuming and focus on the businesses of the stocks you own or are interested in.
Companies report results quarterly or half-yearly. A company may at times launch some new products, projects, or services that can significantly alter its growth prospects. These are the key things to take note of. More often than not, 90% of what’s reported in the financial press is of no concern to a particular company.
If you'd like more investing insights as well as the latest news about Singapore's stock market, you can get both from The Motley Fool's free weekly investing newsletter, Take Stock Singapore. Written by David Kuo, Take Stock Singapore can help you grow your wealth in the years ahead. So, come sign up here.
The Motley Fool's purpose is to help the world invest, better. Like us on Facebook to follow our latest news and articles.
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Chong Ser Jing doesn't own shares in any companies mentioned.