Media Opinion - Unhelpful Noise?

 

There are many competing opinions on investment markets expressed in the financial press that are mostly quite unhelpful to the average investor.  Any particular thesis about the market should not be regarded as new information.  It is opinion.

The competing views of market participants are already be reflected in today’s prices.  Markets very efficiently assimilate of all known information and the combined future expectations via millions of transactions each day responding to news as it happens.  Only new and unknown information that will impact investment outcomes from here – that involves predicting the future, which is speculation not investment.  

The chart to the right demonstrates the volatility of the NZSX 50 on a month by month basis over 22 years.  Basing your investment strategy on short term media opinion will be unhelpful in positioning for gain in this volatile environment, compared to a long term strategic asset allocation.