How to eliminate market noise from your life
|
I’m kidding. You can never eliminate market noise. Unless we put a huge box over our head and don’t step out of the house. In recent months, headline news from the Iran conflict keeps changing many times a day. And that’s a big reason why stocks have been bouncing up and down. Somewhere in the middle of all that, I found myself thinking about the most common piece of advice gurus and advisors love to give: “Just ignore the market noise". “Just ignore the market noise.” Yes, they are right. Telling people to ignore market noise is well-meaning advice. It’s like motivational speakers telling you to STAY POSITIVE. The problem is it’s incredibly hard to ignore market noise. When your stock portfolio goes into red, you get that uneasy churning in your stomach. I admit, I get that too. It’s our body’s fight or flight instinct kicking in. So doing nothing can feel unnatural and that’s why people panic sell. Today, it’s even worse when market noise follows us everywhere - social media posts, YouTube, news alerts from apps and so on. So I’m going to give you the greatest secret in today’s email… Market noise is never going away.And I’m ok with that. Sure, take the good advice from gurus and advisors to just “ignore the market noise.” But the better advice is this: Have perspective. Think about this. Dinosaurs have lived for over 165 million years on earth. Humans have only existed for around 300,000 years. And me? I’m turning 39 this year. My third boy is coming out soon. And if life goes well, I might still have another 40 to 50 more trips around the Sun. Now compare that timeline to today’s news. The Iranian war has just started not too long ago. Headline news keeps changing between good and bad news. And stocks are down into correction territory. It sounds scary. But just so you know, Warren Buffett had no idea his multi-billion dollar investment fund would have crashed over 30% a few times. The worst was during the 2007-2009 global financial crisis. As I’ve shared with Diligence Wealth Club members yesterday on my live portfolio updates… Come to think of it, I’m sure Warren Buffett must have felt like a punch in his guts at times too. Yet Berkshire Hathaway continues to thrive through market cycles - the inflation shock in the 1970s, Black Monday, the dot-com bubble, the global financial crisis and so on. Have perspective.Once we accept the market noise is never going away. Once we accept our stomach will still churn when the stock market gets bashed down, the next thing we need to do becomes much clearer: We focus on accumulating high-quality dividend stocks for our portfolios. This way, even with all the market noise, you’d still be paid dividends month after month… Simply put, whether oil prices keep rising, or guessing how long the war would last, solid businesses that are still the top dog in their own industries still have their durable competitive advantage, sustainable earnings power and a strong financial position. They command a good return on investments. And ultimately, reward shareholders with ever rising dividends and a higher share price. As far as market noise is concerned, what feels terrifying in that moment often looks much smaller in hindsight. Trust me, once we focus on buying a basket of solid, dividend growers, market noise becomes a distraction. Also, I love to share some of my favourite articles for March:
xoxo Sometimes, investing can be simple. Willie Keng, CFA Founder, dividendtitan.com P.S. Like this issue? Click HERE to join other dividend investors reading my DT Compound Letter. I send my regular letters to your inbox. |
Dividend Titan
You’ll remember Cathie Wood. It’s not too long ago she was everywhere. I first wrote about her in my email newsletter back in March 2021. Back then, readers and members were asking me about ARK Innovation ETF (ARKK), the flagship ETF managed by Cathie Wood. My answer is the same as it is now. Over the years, ARK Innovation ETF has shed ~US$21 billion in AUM since its peak, dropping to a low of ~US$8 billion. According to Morningstar, ARKK has lost over US$13 billion of investors’ capital. I’m...
A billion-dollar telco merger has collapsed. A major industrial Singapore REIT is facing growing pressure. And one of Singapore’s transport giants is suddenly raising fresh questions among investors. So what’s really going on beneath the surface? Yesterday, I sat with Michelle Martin on MoneyFM89.3 to break down some of Singapore's favourite dividend stocks. We discussed: Why the Simba-M1 merger collapsed - and what it could mean for Singapore’s telco sector Is Mapletree Industrial Trust a...
Something’s happening in the bond market. And it’s making people nervous. The 30-year Treasury bond yield has climbed to its highest level. And if there’s one thing we don’t know today, it is where long-term interest rates are ultimately headed. You don’t know. I don’t know. Even Mr. Market doesn't know. But what I know is this. When bond yields move like this, it’s a signal. First - how do bond yields actually work? You see, long-term bond yields - especially the 10-year and 30-year Treasury...