This One Trick Eliminates 90% Of Market Noise

 

Do you know anyone in this cycle?

There’s a cycle that investors go through in an attempt to find out what really works in investing.

And it’s in the second phase of this cycle that people unknowingly end up repeatedly hurting themselves…badly.

The cycle starts with people going to a conventional adviser.

Conventional advisers come in three shades of the same color. The most popular is the big-box adviser… but gaining ground in popularity is the independent adviser and even the boutique adviser.

Sooner or later the investor notices that their money goes up and down with the market minus the conventional adviser’s fees commissions and expenses.

The investor might spend time in the above step moving between big-box to boutique to independent for example but the results are always the same…

They get the market moves minus fees, commissions and expenses.

And after getting this clarity, the investor leaves the conventional world of advisers and enters the second phase of the cycle of investor awareness.

And unfortunately it’s in this phase that their money gets hurt even worse.

— — —

They enter the Do It Yourself World of Investing.

The typical path is to buy some books, go to some workshops and eventually the investor ends up in the “pick-of-the-month” newsletter world.

This is where the investor owns three to six investment newsletters that are written by English majors that tell amazing stories about the ‘Amazon of China’ or the ‘eBay of Brazil’.

And because humans love stories, they have a pavlovian reaction to them. And as a result of this reaction, they do one of two things…

One, nothing… because the noise from all the stories and weekly-picks cause their brains to shut down or… two, they become active traders… buying and selling all these different stories.

The problem is, their money suffers.

The science, data and evidence is very clear about people who consume “pick-of-the-month” newsletters.

On average, they grow their money 3.3X worse than just buying the S&P500 with dividends reinvested.

The reason this 3.3X number has been consistent since the 1970’s (when data started being collected) is because they are constantly getting hit with information that sounds interesting but is not important.

And then its what happens next, that is the damaging part.

These consumers of investment newsletters are swimming in a sea of distraction, consumption and overwhelm.

— — —

The solution?

Let me show you in this weekend’s podcast how to eliminate 90% of the distractions and noise.

You can get access to my weekend podcast right here.

In Your Corner,

RCPeck-Dig Signature.JPG     
RC Peck, CFP  

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