Pick up your phone on any given day and you'll find some version of the same stories: a geopolitical event flares up, the Fed said something, analysts spend the next 72 hours attempting to decipher what it actually meant, Company ABC missed earnings by seven cents a share, inflation ticked up or down, yields spiked or dropped. Whatever. By the time you're reading this, the specific headline will be different, but the same.
I never believed any of it was useful in my actual duties as a long-term wealth planner. And yet for years I felt obligated to maintain an opinion on it anyway. When someone asked what I thought about the jobs number, I commanded myself to thoughtfully answer. What I've come around to is that having an opinion on any single data point is mostly theater.
Here's the pattern: a piece of data comes out, it gets framed as urgent — this jobs report changes everything — it moves markets for two or three days, and within a month nobody remembers it happened. Then the next one arrives and the cycle resets. Financial media has to treat every data point like a plot twist because urgency (especially negativity) is the business model. Your portfolio isn't a news cycle. It's a thirty year project, and almost nothing that happens this week is information you need to act on.
Here are examples of items to completely ignore:
- Consumer sentiment surveys — University of Michigan's, or whichever version is making the rounds that month
- The Fed's dot plot
- Forward-looking earnings guesses. Nothing is funnier to me than a room full of analysts confidently modeling what a company will earn twelve months from now
- The yen-lira spread, or whatever similarly obscure cross-currency relationship someone's decided is signal this quarter
- Anything a chartist puts out
- The Men's Underwear index (yes, it's a real thing)
There are truly countless others. None of that is noise because it's fake (well, some of it is imo). It's noise because it's not actionable for you, specifically, given what you're actually here to do. Almost nobody who sits across from me is trying to correctly predict the Fed's next dot plot. They're trying to retire well, protect what they've built across generations, and live a life that means something along the way. Those goals don't move because 67% of the companies in the S&P beat earnings estimates vs. last year's 51%.
What does matter gets a lot less airtime, probably because it's boring and doesn't drive clicks or column inches. It's your savings rate. It's whether your allocation actually matches how long your money needs to last, not how you feel about the market this year. It's the fee and cost drag compounding quietly in the background of whatever you're invested in. It's your securities location and tax strategies. And more than anything, it's whether you can stay invested through the stretches that are rough — because the evidence is overwhelming that investors do the most damage to themselves reacting to a headline at exactly the wrong moment.
I'm not saying ignore the news. Eh, I sort of am. But if you must, I'm saying hold it loosely, and ask one question anytime something feels like it demands a reaction: does this actually change my time horizon, my goals, or my plan? Almost always, honestly, no. I must heed the news of course, but I've learned to compartmentalize and sieve over the years. And it can be exhausting. Don't be like me.
Next time I want to get into why the people paid to forecast this stuff professionally — the strategists, the economists at the big banks — have a track record that would get anyone else fired.