2023-07-29 05:06:20
We are often told that in investing, the most important thing is to aim for the long term. I wonder why the media regularly inform us of the daily upheavals of the stock market. Is it really relevant?
Nicolas Tremblay
The role of the media is to inform the public, and reporting on the pulse of the markets is part of that mission.
Market buffs may be interested in daily stock market fluctuations in the same way that sports enthusiasts consult daily analysis and statistics of the games of their favorite teams and players.
Without being a fan, knowing the mood of the markets makes it possible to follow upward and downward trends and to know approximately where the economy or even a company is located in an economic or stock market cycle.
And since ignorance is our enemy, regularly informing ourselves of what is happening to better understand the world in which we live is a healthy and desirable ritual to maintain.
An investment professional who asks not to be named because his employer does not allow him to speak publicly pointed out to me this week that there is nothing worse in his job than reviewing the portfolio of a customer while the latter watches him like a deer on the road in front of a car with the headlights on.
Investments and stock markets may not appeal to everyone, even though they should. But taking a minimum interest in it helps to understand the dynamics of the markets and can avoid panic when a sudden event occurs.
It is certainly useful to follow financial news and daily fluctuations, if only to realize to what extent the impact of certain events can only be temporary and to help us better understand whether an investment strategy retains all its sense.
The ups and downs of everyday life can obviously invite and even incite to buy or sell a security, which would inevitably affect a long-term strategy in favor of a short-term strategy.
This is why one must avoid overreactions or panic – which is not easy to do given human nature – and remember that reacting impulsively to the news of the day might defeat objectives. long-term terms set with his investment advisor.
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