Dear readers,
AS you read this, I’m taking a much-needed break and visiting family in Zimbabwe. Even though I won’t be closely watching the financial markets for the next few weeks, I wanted to make sure you had something valuable and reassuring to guide your investing journey during my absence.
In today’s fast-paced world, headlines, social media, and market “noise” are everywhere. One day it’s about a new tech rally.
Then next, there’s a panic over jobs, inflation, or the latest political debate. We all know the feeling: the urge to react fast, buy into the latest fad, or sell in a moment of fear.
But as I have learned from my years as a retail investor and trader in the US and Canadian (TSX) markets, the smartest investors know how to filter out distractions and stick to a clear road map.
Let’s break down how anyone — even those relatively new to investing — can get better at tuning out market noise and making decisions from a place of confidence, not emotion.
Market noise is all the short-term headlines, speculation, predictions, and social media buzz that don’t actually affect a company’s long-term value or the big-picture direction of the economy.
Think back to dramatic news moments: a surprise Federal Reserve rate decision, tweets from influential CEOs, or a quarterly report that misses estimates by a penny.
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Often, prices swing wildly for a few hours — or days — then settle right back, leaving most investors only stressed or second-guessing their plans.
As an example: During the Covid-19 pandemic, headlines sometimes swung from hopeful drug news to new lockdowns within hours.
Both the US S&P 500 and Canada’s TSX index saw huge daily moves — but anyone who stayed the course and resisted overreaction came out far ahead. Not all news is noise — some of it genuinely matters for your portfolio. The challenge is knowing what to pay attention to and what to ignore.
Here’s how I keep things in perspective:
- Is this news a one-time event, or is it likely to change the long-term outlook for a company, sector, or the overall market?
- Is there hard data behind it, or just opinion and speculation?
- Are the sources credible? Big moves based on rumors often don’t last.
- Does the news fit my investment plan — or is it just tempting me to act quickly?
For example, when the Bank of Canada announces interest rates, that has real effects on borrowing costs. But when a famous investor says “stocks are doomed” on TV, it often reflects a short-term viewpoint, not hard data.
The hot investments of the month — whether meme stocks, cryptocurrencies, or tech IPOs — often generate the loudest buzz. But their long-term payoff is rarely as strong as it looks at first.
Consider past market fads: cannabis stocks in the TSX a few years ago, or meme stocks like GameStop in the US. Many people rushed in after seeing big headlines, only to watch values come back down to earth.
Instead, focus on what has always worked over time:
- Companies making profits and generating cash flow.
- Businesses with strong leadership and sustainable markets.
- Diversification — spreading out risk across sectors and geographies.
A Canadian example: the banks. Big five banks rarely make headline splashes, but quietly generate steady dividends and have weathered every crisis from the dot-com bubble to the Great Recession.
In the US, companies like Johnson & Johnson, Procter & Gamble, and Microsoft have grown for decades by focusing on fundamentals.
A written investment plan is your shield against noise. Decide in advance what you own, why you own it, and under what circumstances you’ll make changes. Review it regularly, but don’t let every newsflash change your direction.
Questions to guide your plan:
- What am I investing for? (retirement, family home, education, etc.)
- What is my time horizon—five, 10, or 20+ years?
- What mix of stocks, bonds, and cash feels comfortable?
- When will I rebalance or make changes (annually? after big life events?)
Market corrections and volatility are normal parts of the investing process. When the S&P 500 drops 5% in a week or emerging markets get jittery on election news, remind yourself of your long-term goals. Most studies confirm: those who stick with their plan, even through storms, come out ahead over time.
It’s so tempting to jump in after seeing friends or social media users boast about their winnings in the latest hot stock or quick trade. But the reality is, by the time most people hear about a trend, the best gains are often already over, and the risks of buying in late are high.
Instead, trust in steady, disciplined habits:
- Set up automatic investments (monthly purchases in index funds, for example).
- Rebalance your portfolio on a regular schedule, not on emotions.
- Take profits systematically — don’t let winners or losers get too big.
- Avoid checking your account every day.
Legendary investors like Warren Buffett remind us: “Be fearful when others are greedy, and greedy when others are fearful.” When the crowd clamors, take a breath and stick to your plan.
Let’s make this real:
- The March 2020 Covid market crash sent the S&P 500 down over 30% in barely a month. Many sold; some even panicked at the bottom. But those who ignored the noise and stuck to strong ETFs or blue-chip stocks saw not only a full recovery, but record new highs over the next two years.
- During the cannabis-stock craze in Canada, the headlines were relentless. Many who bought late in the frenzy are still waiting to break even, while those who focused on diversified portfolios did far better.
- Every rise and dip in Apple, Tesla, or Shopify generates intense chatter. Yet, the investors who simply kept buying small amounts throughout the ups and downs (dollar-cost averaging) have generally done best.
Investment isn’t just about numbers, it’s about psychology. Recognise when fear or greed is influencing your decisions.
If you feel anxiety, step back. If something sounds too good to be true because everyone is talking about it, give yourself some distance. Often, doing nothing is an investment decision too—and it’s frequently the best one.
While I’m enjoying time in Zimbabwe and not actively trading, I wanted to share these lessons I’ve learnt as a humble retail investor in the US and TSX markets. Remember — this is not investment advice, just some wisdom from experience.
Be patient, stay the course, and make sure your strategy fits your life and your goals.
Until next time, trade and invest wisely and may the markets be on your side.
