In a Twitter
in a twitter idiom
Definition:in an agitated state.
Source:Oxford English Dictionary
It has been a strong year for financial markets, but you’d hardly know it based on the attitude of investors. Nearly every type of investment has risen this year–many handsomely–and economic fundamentals remain solid. Yet investor angst about the economy is the highest in years (see the chart at bottom).
What accounts for this disconnect? We see two reasons. The first is that due to the trade war with China, Wall Street and Washington now share the same news cycle. America’s raucous politics are part of the storyline for the stock market. In the past, it was easier for investors to separate the two.
The second reason is the proliferation of social media. Mark Twain wrote, “A lie can travel around the world while the truth is still putting on its shoes.” In a similar way, misleading or alarmist market headlines can now be shared instantly around the globe through outlets like Twitter and Facebook. By the time careful and reasoned analysis arrives, investor attention has moved elsewhere. On top of this, smartphones allow investors to receive updates on their money any time, any place.
So, what should investors do? Unplugging from the news isn’t the answer. Instead, remember that your long-term financial plan–not daily market headlines and volatility–should drive your investment strategy. Likewise, when consuming financial news, distinguish between what writer Nate Silver called “the signal”–news intended to inform the reader–and “the noise”–news intended to entertain or provoke. Indeed, that is the aim of this quarter’s report: to focus on what matters most for your money.
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